From Our Blog
TPP - Pluses and Pitfalls
Touted as a 21st century trade agreement, the Pacific-wide Trans Pacific Partnership agreement has its pluses and pitfalls according to a Radio New Zealand National Insight documentary aired recently.
NZUS Council Executive Director, Stephen Jacobi, said our future depends on our ability to connect. Not only do we need freer movement of goods he said, but also services, capital and people.
Professor Jane Kelsey, a well known opponent of TPP, warned that the agreement is an attack on national sovereignty and that nations signing up risk financial instability and privacy intrusions.
New Zealand has been involved in trans-pacific trade pacts since 2005 when it signed the P4 agreement with Brunei, Chile and Singapore. This was the launch pad for TPP which now involves 12 countries including some of New Zealand's biggest trading partners - the United States and Japan. Collectively the TPP economies account for $US27 trillion in GDP.
Calman Cohen of the Emergency Coalition for American Trade noted the TPP supports job creation. His organisation therefore advocates strongly for the agreement. President Obama has put TPP at the centre of his trade policy.
Responding to the observation that New Zealand's prosperity is increasingly tied to the Asia Pacific region, Stephen Jacobi said our free trade credentials are second to none. As a champion of free trade we have a strong incentive to "get things right". We also need to recognise the changing way of doing business in a globalised world. Our exporters are supplying into global value chains where our wood is made into furniture in China which is sold into the US, where our food is imported by Japan and used in products sold elsewhere in Asia.
Hayden Green, a writer for Consumer NZ, takes issue with the fact the public have been kept in the dark. Calman Cohen points out that a degree of secrecy is essential to get the deal done. Stephen Jacobi noted that recent leaks show NZ negotiators are defending our interests and that no one country can call all the shots.
There is little doubt the agreement will be concluded. Calman Cohen hopes it will be agreed by the end of the year. Stephen Jacobi said could be early in the new year. Interest being expressed in joining the agreement by China and Korea indicate it is a deal worth having.
Asia Pacific Integration - trade and economic dimensions
EXTRACTS FROM NZUS EXECUTIVE DIRECTOR'S SPEECH TO NEW ZEALAND INSTITUTE OF INTERNATIONAL AFFAIRS - Wednesday 13 November 2013
Trade negotiators tend to take a rather disparaging view of APEC which operates as a voluntary and non-binding arrangement. However unsatisfactory APEC's processes are, the organisation exists and has a history of achievement. It is the glue which holds the framework of regional cooperation together.
China, as the incoming APEC Chair for 2014, has already spoken about ensuring that APEC provides a forum where economies can share information about negotiating processes.
India is not part of APEC but is a participant in the Regional Comprehensive Economic Partnership (RCEP).
It seems to me inevitable therefore that a way will have to be found to include India, along with other aspirant economies like Colombia in APEC at some point soon - if only to ensure that the wider region moves ahead cohesively in the future.
Despite the continuing reluctance of the APEC economies to contemplate anything that might resemble an actual decision to do something by date certain, the Free Trade Area of the Asia Pacific (FTAAP) concept continues to inform the direction in which much of APEC's work is said to be headed.
Japan's participation in the Trans Pacific Partnership negotiations, along with Canada and Mexico, has changed the game not just for New Zealand but for all the participants in TPP by increasing significantly the economic gains from the expansion beyond the initial nine.
I think there can be little doubt that TPP, as the more advanced process, will deliver an outcome before RCEP.
When that might be is uncertain at best, but my guess is the negotiation will be concluded if not by the end of this year, then in the first half of next year.
Interview with Stephen Jacobi on The Beatson Interview
Check out this interview with NZUS Council Executive Director Stephen Jacobi, and Jane Kelsey on the Trans-Pacific Partnership (TPP). This took place on The Beatson Interview show, and aired on 15 October 2013.
There has been great progress around TPP lately, with the NZ-Japan Partnership Forum happening in Tokyo, Japan, and the succesful APEC Leaders' Summit in Bali, Indonesia.
TPP Leaders have confirmed that TPP is on track to deliver an ambitious, high quality and comprehensive outcome. You can read the full Leaders Statement here.
TPP is still a work in progress but is entering the end game. Negotiators have more hard talk to get through. The issues under discussion are substantive and getting it right is important. But the Leaders' statement is pretty clear about what they expect to happen and the business community will be watching this process and doing all it can to ensure that TPP is brought home.
You can check out the YouTube clip here.
NZ agriculture and food coalition supports core TPP principles
Following the conclusion of the 19th round of negotiations on the TPP on 30 August in Brunei Darussalam a coalition of agricultural and food organisations led by Beef + Lamb New Zealand and Fonterra Cooperative Group has spelled out expectations for a successful Trans-Pacific Partnership (TPP) trade agreement.
The coalition made up of 13 agricultural and food organisations has written to Trade Minister Tim Groser and Primary Industries Minister Nathan Guy, outlining a set of principles to ensure the TPP negotiations “fulfill the promise of a high-quality agreement that can serve as a standard for future trade agreements.”
The group said a final TPP agreement must:
• Cover all elements of trade and investment, including agriculture, goods, services, digital trade, competition policy and intellectual property.
• No product or sector exclusions, including in agriculture. Exclusions would limit opportunities in each of the member countries to reach new markets, grow businesses and generate economic growth and jobs.
• Phase out all tariffs and other market access barriers by the end of the negotiated transition period. Transition periods must have commercially meaningful timeframes, which should be short and not back-loaded.
• Include robust outcomes on sanitary-phytosanitary (SPS) issues. SPS measures also must be supported by risk-based scientific decision making, regulatory convergence and equivalence.
• Include a “Rapid Response Mechanism” to resolve issues with perishable and time-sensitive shipments of agricultural products held up as result of SPS and technical barriers to trade.
• Include an enforcement mechanism for trade obligations that go beyond those in the World Trade Organization. Failure to include such a mechanism would render new TPP disciplines valueless.
• Be a single undertaking. All elements of the negotiation, including tariff and non-tariff SPS measures, must be part of an indivisible package and cannot be agreed upon separately.
Sir Graeme Harrison, Chairman of the New Zealand International Business Forum (NZIBF) said the TPP needs to be an ambitious, high quality, comprehensive agreement, with no product or sector exclusions, address non-tariff barriers and be enforceable.
Taiwan Agreement a positive step towards regional economic integration
The New Zealand International Business Forum (NZIBF) told Parliament recently that it warmly welcomed the Government’s intention to conclude an economic cooperation agreement (ANZTEC) with Taiwan.
NZIBF’s Executive Director, Stephen Jacobi, told the Foreign Affairs, Defence and Trade Select Committee, that the ANZTEC agreement is high quality, ambitious and comprehensive. He was enthusiastic about the fact that it’s the first of its kind between Taiwan and an OECD economy.
He pointed out that the agreement provides a wonderful opportunity to expand trade and investment linkages with Taiwan, noting that the economic benefits to New Zealand are considerable. The comprehensive tariff elimination and other improvements to the rules governing trade and investment will lead to improved returns for business and lower costs and more product choice for consumers.
By the end of the first four years 98.7% of current exports to Taiwan will be duty free. New Zealand could expect to generate increases in merchandise exports in excess of $100 million. On entry into force tariffs on 44% or $432.5 million of New Zealand’s current exports to Taiwan will be eliminated, with an estimated duty saving to New Zealand exporters of $40.3 million.
The agreement is also innovative in its treatment of labour, environment and indigenous issues. It will create new opportunities for New Zealand in the education services sector and facilitate a growing investment relationship.
The NZIBF recommended the agreement’s early ratification and entry into force.
Welcome to the TPP negotiators.
New Zealand has been a key player in the Trans Pacific Partnership agreement. Given the potential benefits of TPP for New Zealand in terms of economic growth and job creation, it is good to see that negotiations are being held in Auckland between 3 to 12 December. As such, the representatives of some major New Zealand businesses and business organisations have written to Government endorsing its current approach to TPP negotiations. They note that there are complicated public policy issues involved in negotiating such an agreement, and that solutions need to be sought that are in New Zealand's overall interests. They also welcome the hard working negotiators.