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What is a suspension or suspended provision?
Twenty-two items from the original TPP have been suspended under CPTPP. This means they will have no affect on CPTPP Parties. Agreement of all CPTPP members would be needed for these provisions to take effect in the future
1. Pharmac is fully protected
Article 3 of Annex 26A suspended.
Pharmac’s purchasing model remains protected, including its ability to continue to negotiate the best price for medicines for New Zealanders. In addition, a provision that would have required Pharmac to make administrative changes that would primarily benefit the pharmaceutical industry has been suspended. Implementing these changes was expected to cost New Zealand an initial $4.5 million and $2.2 million per year thereafter.
2. Businesses cannot sue the Government for investment contract breaches
The suspensions in the Investment Chapter are:
- Article 9.1 Definitions of “investment agreement” and “investment authorisation”
- Article 9.19.1– a(i) B and C; (b)(i) B and C, and the chausette
- Article 9.19.2
- Article 9.19.3 (b) the phrase " investment authorisation or investment agreement"
- Article 9.22.5
- Article 9.25.2
- Annex 9-L
The scope of the investor-state dispute settlement (ISDS) mechanism is narrower in the CPTPP, while strong safeguards to protect the Government’s right to regulate in the public interest and prevent unwarranted claims have been retained.
We can continue to make our own decisions, laws and regulations in areas such as public healthcare and public education in exactly the same way as we currently do. The Government would not accept an outcome that would compromise our independence in these areas.
Suspensions in the Investment Chapter will mean that claims are no longer permitted in relation to investment contracts and approvals (called ‘investment agreements’ and ‘investment authorisations’ in the TPP). This means that under CPTPP private companies who enter into an investment contract with the Government will not be able to use ISDS clauses if there is a dispute about that contract.
Overall safeguards mean the New Zealand Government cannot be successfully sued for measures related to public education, health and other social services, including the ability to rule out cases specifically relating to tobacco control measures.
Decisions made under the Overseas Investment Act are also not subject to ISDS.
We have also retained a reciprocal agreement with Australia, which is the source of 80 percent of our overseas investment from CPTPP countries, meaning that ISDS clauses in CPTPP will not apply at all between our countries. We continue to seek similar agreements with the other countries that share our wider concerns about ISDS.
3. Financial Services claims reduced
Article 11.2.2(b); the phrase “Article 9.6 (Minimum Standard of Treatment)” and Annex 11-E suspended.
Suspensions around minimum standard of treatment related to financial services further reduce the risk of ISDS claims in the CPTPP being taken against New Zealand.
4. Copyright term will stay the same
Article 18.63 suspended.
New Zealand will no longer be required to extend the term of protection for copyright from 50 years to 70 years. The copyright term for films and sound recordings (including recorded music) expires 50 years after the end of the calendar year in which they were made or published. The copyright term for books, screenplays, music, lyrics and artistic works expires 50 years after the end of the calendar year in which the author died.
It was previously estimated that the long-term cost of this extension would be $55 million per year to New Zealand consumers. This was one of the main quantifiable costs in the National Interest Analysis of the original TPP Agreement.
5. and 6. There are no data or market protection obligations for new medicines, including biologics
Articles 18.50 and 18.51 suspended.
New Zealand already has laws, policies and settings that provide a period of market protection to new medicines against competition from generic copies, and these met TPP obligations. Under CPTPP there is no requirement for any Party to change its data or market protection settings for new medicines, including small molecule medicines, biological medicines (medicines manufactured in or derived from a living system such as plant or animal cells) and medicines that contain a previously approved active ingredient.
7. More flexibility around what is patentable
Article 18.37 paragraph 2 and the last sentence of Article 18.37.4 suspended.
CPTPP will not lock in our existing domestic policies that provide patent protection for new uses of known products and make patents available for inventions that are derived from plants, giving us flexibility in the future.
8. and 9. There are no patent term extension obligations
Articles 18.46 and 18.48 suspended.
New Zealand does not have to change its laws to enable people to apply for an extension of the term of a patent following unreasonable delays: (i) in the patent examination process by the Intellectual Property Office of New Zealand; or (ii) in obtaining approval from Medsafe for a pharmaceutical product’s entry into the New Zealand market.
10. Government procurement processes unaffected
Article 15.8.5 suspended.
The CPTPP establishes rules ensuring open, fair and transparent conditions of competition in government procurement. These are consistent with New Zealand’s Government Rules of Sourcing, and no changes to New Zealand’s government procurement regulatory framework will be required.
Article 15.8.5 was originally included to clarify that procuring entities may promote compliance with international labour rights as part of their procurement processes. This remains the case even with the suspension of this article.
11. Negotiations to expand government procurement coverage delayed
Article 15.24.2 phrase “No later than three years after the date of entry into force of this Agreement” suspended.
Any negotiation to expand coverage of the government procurement chapter, particularly in relation to state government and local government contracts, will be delayed. Parties will only initiate talks on this issue at least five years after the date of entry into force of the Agreement.
12. No new laws for breaking digital locks on copyright works
Article 18.68 suspended.
New Zealand will not have to provide more extensive protection to technological protection measures (TPMs), the digital ‘locks’ used to protect copyright works.
13. No change to laws protecting rights management information
Article 18.69 suspended.
In addition, New Zealand will not have to provide more extensive protection for rights management information (RMI), which is information that identifies a copyright work, its copyright owner and, if applicable, the terms and condition of the use of the work.
14. No obligations around the liability of internet service providers
Article 18.82, Annex 18-E and Annex 18-F suspended.
New Zealand’s rules for liability of internet service providers for online copyright infringement will not change and we retain flexibility to adjust them in future.
15. No new laws for cable signals
Article 18.79 suspended.
New Zealand will not have to provide more extensive protection for encrypted programme-carrying satellite and cable programme signals (such as a pay television services).
16. Committed to stopping trade in endangered species
Article 20.17.5 phrase " or another applicable law" suspended.
The CPTPP does not impact New Zealand’s commitment to the United Nations Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). New Zealand strongly support CITES and is fully compliant with its obligations.
The suspended language in Article 20.17.5 would have required Parties to take action to address violations to the wildlife trafficking laws of countries that were non-Parties to the CPTPP. New Zealand was comfortable with these obligations, but other Parties felt they raised practical difficulties around the nature of evidence required, the appropriate authority to take action, and knowledge of non-Parties’ laws.
Apart from this one suspension, the Trade and Environment Chapter remains unchanged. It remains the most comprehensive chapter related to environmental protections that New Zealand has achieved in a free trade agreement and is legally enforceable for the first time.
17. No obligation to review customs duties on express shipments
Article 5.7.1(f) second sentence suspended.
The suspension related to customs duties review provisions has no impact on New Zealand. With or without the provision, all Parties maintain the right to regulate and review customs duties for express shipments, as they deem appropriate. The provision does not relate to the right to impose internal taxes such as GST.
18. Telecommunications dispute regime unchanged
Article 13.21.1(d) suspended.
The suspended provision provided for reconsideration of decisions made by telecommunications regulatory bodies, and has no impact on New Zealand. New Zealand's Commerce Commission and judicial review regime already met the suspended requirement of the provision, without any need to change legislation or practice.
19. Disciplines on postal monopolies will be limited
Annex 10-B paragraphs 5 and 6 suspended.
Sole postal operators are able to continue within CPTPP countries. NZ Post remains unaffected by this suspension.
20. National treatment in intellectual property is aligned with international rules
Article 18.8 the last two sentences of footnote 4 suspended.
This technical change has little impact on New Zealand. National treatment obligations on intellectual property govern how countries must treat the intellectual property of foreigners. The suspension means that the CPTPP aligns with the existing international rules on national treatment for intellectual property.
21. and 22. Commitment Starting Dates Adjusted
Annex II Schedule of Brunei Darussalam – 14 – paragraph 3: the phrase “after the signature of this Agreement” suspended.
Annex IV Schedule of Malaysia – 3 and 4 – Scope of Non-Conforming Activities: all references to the phrase “after signature of this Agreement” suspended.
The phrase “after signature of this Agreement”, as it appears in certain paragraphs of the State Owned Enterprises, Annex IV Schedule of Malaysia and the Services and Investment Non-Conforming Measures, Annex II Schedule of Brunei Darussalam has been suspended.
As a result of these suspensions, the starting time of the relevant commitments will now be the date of entry into force of the CPTPP for Malaysia and Brunei Darussalam respectively instead of the date of signature. This reflects New Zealand’s usual practice for implementing trade agreements.