6 Sep 2011

Trade talks target state support for businesses

8:39 am on 6 September 2011

Negotiations for a Pacific Rim trade deal including New Zealand have taken another controversial turn as talks resume in Chicago.

The United States is pushing for the outlawing of state support for companies but is facing opposition in the nine-country TransPacific Partnership.

New Zealand Council of Trade Unions' economist, Bill Rosenberg, says that if government support for companies was opened to legal challenge, state-owned firms such as KiwiBank, KiwiRail, ACC and Air New Zealand would be potential targets.

Industry co-operatives Fonterra and Zespri, which have had past legislative support, would also be open to challenge.

United States trade sources maintain that state-owned firms in communist countries like Vietnam are the real issue.

However Dr Rosenberg says New Zealand still risks becoming collateral damage if it agrees to such a deal.

US business interests are already pushing for changes, through the talks, to the drugs-buying agency Pharmac.