TPP optimism in NZ despite US retreat

Trade Minister Todd Mcclay hasn’t given up on the Trans-pacific Partnership (TPP) agreement despite a further blow to its seemingly slim prospects in the United States.

Questions have now been raised about whether more international trade talks may be put in limbo.

US president-elect Donald Trump promised during his election campaign not to ratify the TPP agreement in its current form, labelling it a ‘‘disaster’’.

The Washington Post reported overnight that Republican congressional leaders had now ruled out approving the deal before Trump is sworn-in on January 20, seemingly closing the last avenue for the agreement to proceed.

Mcclay nevertheless expected debate on the enabling legislation for the TPP would resume in Parliament tomorrow or Thursday, after its third reading was interrupted this week.

He reiterated that TPP countries had two years to ratify the agreement and it was ‘‘important we give the US president-elect time to put his team in place and consider his trade agenda’’.

Trump’s election has raised questions about whether ministerial meetings on two other trade deals may be delayed until next year.

Meetings have been due to take place in Geneva next month about the TISA agreement covering trade in services, and the proposed Environmental Goods Agreement.

The latter is designed to remove tariffs and other barriers on goods that help the environment and combat global warming, such as solar panels, wind turbines, recycling equipment and carbon-dioxide scrubbers.

The US could now only be represented at the talks by the outgoing Obama Administration, rendering any decisions moot.

Mexico’s economy minister, Ildefonso Guajardo, said last week that if the US gave up on the TPP, the other 11 nations involved in the agreement could press ahead without the US.

That would require an amendment to the agreement.

Mcclay said it was ‘‘not really conceivable’’ that the TPP would go ahead without the US.

The drop-dead date for the agreement was February 3, 2018, so there was ‘‘more than 12 months before we have to consider anything like that’’, he said.

But he noted the Government was involved in parallel trade talks – some with countries that were party to the TPP.

These include the Regional Comprehensive Economic Partnership negotiations with 16 countries that include Australia, China, India and Japan.

The Government also supported ‘‘a comprehensive Pacific-asia wide agreement’’ which is due to be discussed at an APEC meeting in Peru next weekend, he said.

The TPP originally kicked off in 2005 without the involvement of the US, as a discussion between New Zealand, Brunei, Chile and Singapore.

The bulk of the direct financial benefits of the agreement for New Zealand would come from greater access for Kiwi exporters to Japan, rather than the US, according to the Foreign Affairs and Trade Ministry.

The ministry has forecast the TPP would eventually cut annual tariffs on Kiwi exports by $274 million a year. Of that, $202m would come from reduced tariffs on exports to Japan and only $52m from improved access to US markets.

Some of the more quantifiable costs of the TPP to New Zealand come from demands driven by the US.

These include a plan to extend the length of copyright from 50 to 70 years, which the ministry has ‘‘conservatively’’ estimated would eventually cost Kiwi consumers $55m a year.