Source: New Zealand Parliament
The side letter proposes an agreement, between New Zealand and Chile that aims to prevent investors from either country making a legal claim directly against the government of the other under the CPTPP.
The CPTPP includes provisions for Investor-State Dispute Settlements (ISDS) that allow investors from signatory countries to litigate directly against other states that have signed the treaty.
Where possible, New Zealand has been making agreements directly with other signatory countries to exclude this clause and prevent foreign investors being able to use the CPTPP to take legal action against New Zealand.
Chile is in the process of ratifying the CPTPP and this side letter is the latest in a series of agreements New Zealand has made with countries to exclude the ISDS. No additional obligations are created by the side letter.
Excluding ISDS provisions where possible reflects stakeholder concerns raised during the initial consultation around New Zealand ratifying the CPTPP as well as New Zealand’s general approach to future free trade agreements. The National Interest Analysis prepared by the Ministry of Foreign Affairs and Trade (link available below) speaks further to these points.
Tell the Foreign Affairs, Defence and Trade Committee what you think
Make a submission on the bill by 11.59pm on 22 February 2023.
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