TPP State Owned Enterprise Chapter

 

     This would cover procurement by state owned entities (SOEs).  SOEs could include ACC, public libraries, universities, Pharmac, hospitals, Health Benefits Ltd and the Partnerhsip Schools Authorisation Board.  

 

     It will be illegal to "buy NZ made".  

Government and local councils would not be able to preferentially buy from local businesses as this will be seen as anti-trade by corporations. Corporations would sue government and councils using the secret ISDS courts.

 

     The US proposed this chapter as it said SOEs might compete unfairly with US corporations and workers by having: access to cheaper debt or government equity;  access to public land and infrastructure; cross-subsidising commercial activities from subsidised public functions; non-market dividends, etc.  

 

     The US definition of an SOE is so vague it could extend to universities, Crown Research Institutes, public hospoitals, the Cullen Fund, NZ on Air, Pharmac, etc.  

 

    There are complex reporting obligations and compliance costs, with risks that the same actions of an SOE could be challenged by a range of chapter-specific committees.  

     The SOE chapter would impede the government's ability to use SOEs for social needs, where markets fail to do so.  It would impede using existing government agencies for non-commercial objectives, where there is potential competition from a multinational corporation, as in health or accident compensation.