Government wrong to blame FTA for Crafar sales

A claim by Prime Minister John Key and Land Information Minister Maurice Williamson --- that National had to allow the sale of the Crafar farms to Chinese interests because of the NZ/China free trade agreement which Labour had negotiated --- is plainly wrong, says Labour’s Finance spokesperson David Parker.

“I was in the cabinet that approved the signing of the agreement, the negotiations for which were led by Phil Goff,” David Parker said. “I was Minister of Land Information at the time and recall specifically checking at the Cabinet Policy Committee that New Zealand’s ability to control land sales was not overruled by the terms of the FTA.

“The Cabinet Committee delayed its approval while that assurance was sought and given by the Ministry of Foreign Affairs and Trade (MFAT).

“Subsequently, after the agreement had come into force and the effect of the FTA on land sales was again in the news, I checked with a senior trade official, who confirmed that the relevant clause 138 does not change New Zealand’s ability to turn down applications for land sales,” David Parker said.

“The effect of the clause is that if an investment in land is allowed, then after the investment the Chinese investor must be treated in the same way as a New Zealand investor. In other words, after an investment is made we cannot prejudice the Chinese investor in relation to New Zealand investors, for example by applying different tax rates.

“The FTA does not mean that China or New Zealand gave up control of investments in their countries,” David Parker said. “China certainly did not cede that right and neither did we. Mr English confirmed that this is his also understanding in Parliament during question time on 25 March 2010.

“Another assertion that the ‘most favoured nation’ clause prevents control of land sales is also incorrect. The effect of that clause is that it would be wrong for New Zealand to drop controls on the sale of land to, say, US interests but leave them in place for China. Mr Williamson had the right to decline to consent to the sale of the Crafar Farms and should take responsibility for his wrong-headed decision,” David Parker said.

“If the minister is now saying that National has slipped through some change to the effect of the FTA, he should explain.

“That the minister responsible for protecting New Zealand’s interests does not properly understand his portfolio is of serious concern. Labour is opposed to rural land sales to overseas buyers. We are not singling out China and have criticised sales to German, US, Chinese and other foreign investors.”