Deal would open door to trading with world’s largest economy

With the US Senate’s approval of a fast-track bill on Wednesday, the 12-nation trade deal may be just months away.

Government ministers in the past have highlighted estimates the 12-country Trans-Pacific Partnership, which includes New Zealand and the United States, could deliver annual gains of $5.5 billion by 2025.

Opponents such as the Sustainability Council set the figure about $1b, and say it is doubtful if there would be any net benefit at all.

For New Zealand, a TPP would open a door to a trade deal with the world’s largest economy, the United States, after 20 years of lobbying.

The outcome of ‘‘last, best offers’’ from the key players in the TPP remain unclear. But benefits could come from better access and higher returns because of lower tariffs.

Ideally, the talks would sub- stantially reduce or wipe out barriers to trade between TPP members, increasing the volume and efficiency of trade. About 40 per cent of New Zealand trade is with the countries in the TPP, so there is much at stake.

The specific benefits for New Zealand remain unclear, however, because they depend on the terms of the deal, such as the terms of any removal of US tariffs on dairy products.

A study in 2011 suggested a TPP could boost international trade enormously. By 2025 such an AsiaPacific free trade agreement could boost trade by US$862b ($1.1 trillion), according to a study published by the Honolulu-based East West Centre.

Prominent TPP critic Professor Jane Kelsey of Auckland University said of the study: ‘‘To me it is flying pig territory’’.

The $400 million worth of New Zealand wine exported a year to TPP markets could double under the treaty. The agreement would also help the industry to have a homogenous set of standards across the region.

American dairy farmers may be major losers, if high tariffs are removed on dairy imports.

‘‘Gross revenues received by US dairy farmers would plunge by a cumulative US$20b over the first 10 years of the FTA if US dairy restrictions on exports from New Zealand are fully phased out in the TPP,’’ US dairy lobbyist the National Milk Producers Federation has said of the TPP in the past.