Home > Dollars & Sense, The Body Politic > A FTA deal with Russia?! That’s a big “NYET” Comrade Key!

A FTA deal with Russia?! That’s a big “NYET” Comrade Key!



Politicians sometimes just don’t learn…

Prologue: 2008AD

On 7 April 2008, the then Labour Government signed a  Free Trade Agreement with China. Part of that FTA included the following clauses,

Article 143 Fair and Equitable Treatment

1. Investments of investors of each Party shall at all times be accorded fair and equitable treatment and shall enjoy the full protection and security in the territory of the other Party in accordance with commonly accepted rules of international law.

2. Fair and equitable treatment includes the obligation to ensure that, having regard to general principles of law, investors are not denied justice or treated unfairly or inequitably in any legal or administrative proceeding affecting the investments of the investor.

3. Full protection and security requires each Party to take such measures as may be reasonably necessary in the exercise of its authority to ensure the protection and security of the investment.

4. Neither Party shall take any unreasonable or discriminatory measures against the management, maintenance, use, enjoyment and disposal of the investments by the investors of the other Party.

5. A violation of any other article of this Chapter does not establish that there has been a violation of this Article.

Article 144 Compensation for Losses

Investors of a Party whose investments in the territory of the other Party suffer losses owing to war or other armed conflict, a state of national emergency, insurrection, riot or other similar events in the territory of the latter Party shall be accorded by the latter Party treatment, as regards restitution, indemnification, compensation or other settlements no less favourable than that accorded to the investors of its own or any third country, whichever is more favourable to the investors concerned.

See:  Chapter 11 – Investment

Article 138 National Treatment

Each Party shall accord to investments and activities associated with such investments, with respect to management, conduct, operation, maintenance, use, enjoyment or disposal, by the investors of the other Party treatment no less favourable than that accorded, in like circumstances, to the investments and associated activities by its own investors.”

See: – Ibid

These are the sections which Auckland University law professor,  Jane Kelsey, stated could result in a lawsuit for breaching our Free Trade Agreement with China, in the Crafar Farms affair. Quite simply, Chinese investors cannot be treated differently to local (or any other investors from other nations) in commercial and legal matters.

As Jane Kelsey stated,

If the New Zealand Government had declined the Shanghai Pengxin purchase of the Crafar farms it could have faced an international lawsuit for breaching its free-trade agreement with China. The Government cannot treat applications from Chinese investors differently from similar applications from other countries’ investors under what is known as the ‘most-favoured-nation’ or MFN rule.”

See: Our hands were tied over the Crafar farms sale

Key was more circumspect in admitting this reality of the FTA, when on 27 January 2012, he said on TV3’s ‘Campbell Live’ (@  ),

” … in our view, turning it down on the basis that they were Chinese is not only in my view unacceptable and a bit repugnant , actually it wouldn’t be legally sound either.”

See:  Selling Crafar farms the right decision – Key

Which is about as close as Key has come to publicly admitting that we are bound by our FTA with China to treat their investors on the same footing as New Zealand investors. Whilst this may be met with approval by ACT ideologues, it sound nothing for our country’s economy, nor future investment by our own children who may be priced out of the market by wealthier offshore investors.

Fast forward: 2012AD

Key is now chasing a similar  FTA deal with Russia.  In which case expect more purchases of our productive sector by wealthy Russian investors.

There is everything wrong with this prospect.

Russia is presently ruled by an oligarchy, with Vladimir Putin it’s undisputed head.

This is a corrupt government that stole last December’s  election by voting fraud on a massive scale. Putin’s opponants are either arrested and imprisoned (as in the old Soviet era), or murdered by “unknown assasins”.

See: The farce of Russian elections

See: Russia’s presidential election: rigging is a delicate art

Public dissent is actively discouraged by state repression, and often met with the use of violent force.

See: Putin’s government moves to quash public dissent

The Russian mafia is amongst the most feared globally,  and has strong connections with Putin’s government,

Russia is a corrupt, autocratic kleptocracy centred on the leadership of Vladimir Putin, in which officials, oligarchs and organised crime are bound together to create a “virtual mafia state”, according to leaked secret diplomatic cables that provide a damning American assessment of its erstwhile rival superpower.

Arms trafficking, money laundering, personal enrichment, protection for gangsters, extortion and kickbacks, suitcases full of money and secret offshore bank accounts in Cyprus: the cables paint a bleak picture of a political system in which bribery alone totals an estimated $300bn a year, and in which it is often hard to distinguish between the activities of the government and organised crime. “

See: WikiLeaks cables condemn Russia as ‘mafia state’

And this is the “virtual mafia state” that John Key wants closer economic ties with?!

This aspect should be especially worrying to New Zealand, a small nation especially vulnerable to penetration by sophisticated, organised crime.

More worrying is that our esteemed Security Intelligence Service and Police force – which is adept at spying on Maori activists in the Ureweras or peace activists-turned Green MPs – have  either not informed the Prime Minister of Russia’s corrupt criminal government, with mafia links – or has been ignored by National.

This is more than worrying – this is downright dangerous. Key is playing with fire when he associates with such dangerous people.

Why would National consider cosying up to the Russian government/mafia? Especially when, as Judith Collins stated in October 2009,

Gangs have infiltrated businesses; turning legitimate enterprises into money laundering outlets.  Their money has bought them a veneer of legitimacy that is far more dangerous to our society than anything we have seen before.”

See: Organised crime threatens NZ way of life

Collins was referring to local organised gangs. But the same could hold equally true – if not more so – for international crime gangs that are far more organised; well resourced; vicious; and with links to state power.

The Russian mafia is not one to be trifled with. If Collins is concerned about our local crims, she should be positively panicking over the possibility that a FTA with Russia could draw us into closer contact with organised crime syndicates and their political allies in Moscow.

Dealing with Russia is akin to dealing with Columbia or Mexico, should their organised crime gangs ever gain a foothold in those country’s respective governments (if not already).

The prospect of Russian investors with links to organised crime (or, indeed, a front for crime groups) is one that cannot be easily dismissed.

We need to be damned careful who we, as a nation, build closer relations with.  If Key want to “Dance with the Devil”, he is pulling the rest of us in with him.

This blogger reminds the reader of Eastern European notions of the vampyr legends (no, not the glamourised Hollywood version of young, handsome vampires – the Undead variety of gruesome appearance and dodgy personal hygiene). In popular culture, the vampyr could not cross a threshold to enter you home.

You were safe inside – unless someone in your home invited the vampyr to enter.

Once that invitation was extended, the blood-sucking monster could come and go as he (or she) pleased. There was no stopping the creature, except with the usual methods; stake, sunlight, garlic, ACT Party manifesto, etc.

Damned perceptive, our Eastern European cuzzies.

Just be careful, Mr Key, who you invite into our country…






MFAT: New Zealand-China Free Trade Agreement

New Zealand China Free Trade Agreement (text)

Government could have faced lawsuit

Billionaire’s playground: Russian rich-lister’s home to rival Chrisco mansion

Putin, Key hopeful for Free Trade Agreement



=  fs =

  1. Sentient Headmounted Laser
    11 September 2012 at 2:25 pm

    I’m wearing my khaki hammer-and-sickle t-shirt today!

  2. John B
    11 September 2012 at 2:30 pm

    so he should be right at home then ,with all the scum

  3. Damibott
    11 September 2012 at 3:01 pm

    Who is to say our leaders have higher or better ‘moral standards’ and how many Russian leaders do u know?

  4. Budinski
    11 September 2012 at 3:08 pm

    Yeah I was jut going to say, we are fighting for an FTA with America, THE America, run by wall st oligarchs and mafia Banksters which fix every election, even elections in other countries. Wtf is up with that picture?

    • 11 September 2012 at 8:12 pm

      ‎@ Damibott – None. I don’t know George W Bush either, but I know enough about him not to trust the war-mongering bastard.

      @ Budinski – blogpost on FTA with the US is in the works.

  5. Robin Westenra
    11 September 2012 at 3:20 pm

    You might like to consider this-

    • 11 September 2012 at 10:28 pm

      Thanks, Robin. I did indeed watch it and found it fascinating. Quite an insight into current Russian politics.

  6. Paul G
    11 September 2012 at 4:13 pm

    Free traders don’t care who they deal with. It’s about the ideology.

  7. Paul G
    11 September 2012 at 4:19 pm

    Also the issues of Russia vis-a-vis our own corrupt system are overstated by the Western press. Remember Russia is a darn sight better than the laissez faire paradise that so many rich Westerners (including Kiwis) ripped off post-USSR. Most issues and controversies stem from that hell palce Putin has been dragging them back from. Not his fault what devels were created then that he now has to deal with.

  8. David F
    11 September 2012 at 8:03 pm

    Business is business, capiche?

    • 11 September 2012 at 8:13 pm

      I could hear your Marlon Brando accent when you said that, David!


  9. Damibott
    11 September 2012 at 8:41 pm

    Ummm, And NZ isn’t a war machine either? Are we not gang member number 45 in the ranking system? Anyway, the US is run by a faceless ‘money machine’, which party is ruling is meaningless since the controllers of money only grows free from image.

    • 11 September 2012 at 9:48 pm

      So I take it you support FTAs regardless?

      • Damibott
        12 September 2012 at 12:31 am

        FTA and Free Market discourse’s only feed the interest of the type of people who ask for it… How is that working out for us… ha ha

  10. Murray Olsen
    11 September 2012 at 10:19 pm

    The TPPA still worries me a lot more. The US and A, run by oligarchs, Wall St, ex-CIA, present Monsanto, a Supreme Court which gives away elections, a record of screwing other countries royally in favour of their own corporates, a country which worships having a gun as perhaps the only human right….. What’s wrong with that picture?

  11. Kelvyn Alp
    12 September 2012 at 12:26 am

    Kelvyn Alp All nations have been instructed to enter FTA’s and it will happen because we are all busy arguing over issues of no real importance while the status quo remains.

  12. 12 September 2012 at 2:55 pm

    Significant ethical and moral questions must arise about this proposed Free Trade Agreement, when one considers that Russia is one of the most repressive states in the world. It is a nation where journalists disappear for doing what I am right now – typing a message that is critical of a Government – and they turn up as bodies and not human beings days later. It is a nation with a significant Kremlin-installed fear of alternatives to Kremlinism – i.e. freedom of association, freedom of speech, freedom in general.

    And I don’t think I am alone in saying that whatever one thinks of what Pussy Riot did in the Russian Orthodox Church, they don’t deserve to be jailed.

  13. 12 September 2012 at 5:05 pm

    Ah, so Key and cronies are in good company then…

  1. 19 September 2012 at 8:32 pm

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