The chief negotiator for the Trans-Pacific Partnership (TPP), David Walker, has refused to say whether New Zealand asked for the right to ban foreigners from buying residential houses.
The Labour Party says the TPP undermines New Zealand's sovereignty in not allowing a future government to introduce a ban.
The deal has started its process toward ratification in Parliament after being signed in Auckland last Thursday. The government hopes to complete ratification by late this year.
Dr Walker, who appeared before the Foreign Affairs, Defence, and Trade Select Committee on Thursday, was asked repeatedly whether negotiators had sought a ban.
He told MPs negotiators had defended the current investment screening regime, which did not include restrictions on foreigners buying houses.
"New Zealand not only sought to defend our existing policy but we sought to provide a new policy space for the ability to introduce some new discriminatory taxes."
Labour's committee member, David Clark, took Dr Walker's answer to mean that no request for a ban had been sought.
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The government has estimated the TPP to be worth $2.7 billion a year by 2030.
The deal's opponents argue the benefits are overstated, and the agreement undermines New Zealand's sovereignty.
Dr Walker defended the TPP, warning the country could not afford to be left out.
"If all our competitors have tariff advantage for goods or preferential arrangements for services or investment and our businesses do not, our businesses are going to be at a huge disadvantage in trying to compete."
He also tried to reassure MPs that the TPP did not diminish the government's ability to legislate in the national interest in the face of greater rights for foreign investors.
Dr Walker defended the inclusion of the investor-state dispute settlement process, saying there were safeguards to ensure the government could legislate in the national interest.
"Additional provisions confirm government action to legitimate public welfare measures such as public health, safety and the environment - very unlikely to constitute indirect expropriation.
"The investment obligations in TPP have been drafted in a way that would impose a high burden of proof on investors."
Mr Clark and and fellow Labour MP David Shearer questioned the estimated benefits, with Dr Shearer saying the National Interest Analysis looked like a "selling operation".
Dr Walker told the committee the Ministry of Foreign Affairs and Trade would analyse critiques of the TPP by Tufts University and others.
He said the university's analysis did not follow the usual modelling for trade deals, and its findings should be treated with some scepticism.