Now that the US Congress has finally given President Obama his much longed for fast track trade promotion authority, negotiators can get back to the complex task of completing the Trans Pacific Partnership (TPP).
New Zealand can claim a share of TPP’s parentage. A founder member along with Singapore, Chile and Brunei of the original “P4” agreement, New Zealand was also at the forefront of even earlier efforts to link up the more liberal minded trading nations in the Asia Pacific region. In the mid to late 90s the United States was part of those emerging discussions. How long it has taken to get to where we are today!
As well as being eternal trade optimists, New Zealanders are also mindful of the need to integrate more closely in the Asia Pacific region. Our high-quality FTAs with China, ASEAN, Taiwan, Korea are the result of a well thought-through and well executed internationalization strategy. The United States and Japan are missing pieces. Our economy is small and distant from world markets. Trade – exports and imports – are our lifeblood – it’s what makes possible the successful, smart and developed economy that we enjoy. Yet we are an oddity amongst other developed economies because our largest export earners are natural resource based products – dairy, meat, horticulture, wood, seafood. So clearly the most important issue for us is ensuring that these products benefit from the comprehensive removal of trade barriers in TPP.
New Zealand’s economy is also changing – services, ICT, the creative sector, the ‘weightless economy’ – are all important and growing sectors. So we need also to ensure TPP promotes the market-based innovation and commercial expansion necessary to fuel these sectors’ continuing development. We know too that business models are changing so we share with others the need to optimize supply chains and to ensure we can participate effectively in regional value chains and networks.
When it comes to ratifying the completed agreement – and when we finally get to see the treaty text – we like others will be looking to ensure that our key interests are addressed and any risks minimized. We subscribe fully to the founding vision of TPP as an ‘ambitious, high-quality and comprehensive’ agreement. Not all sectors require the same treatment, but none should be left out. That means especially agriculture. We will want to pay careful attention to the detail of the rules. If there is provision for investor-state dispute settlement, we will want to see the detail of safeguards around the right to regulate, especially on environment and public health. If intellectual property provisions go beyond what is currently the international norm, we will want to see that innovation is not penalised. If there are requirements about medicines purchasing policies, we will want to see that these apply equally to all economies (including the United States) and that citizens continue to have affordable access to the medicines they need.
New Zealand is already an open economy. We have high standards of regulation and a sound judicial system. We are not expecting the adjustment from TPP to pose significant challenges. We pursue agreements like TPP to provide the best possible environment for trade and investment and sound rules for the operation of markets which also reflect our country’s values and interests. If TPP can deliver on its founding vision, we hope to be a proud parent of a new economic instrument which will deliver value for citizens and businesses alike.
This post was prepared by Stephen Jacobi, Executive Director of the NZ International Business Forum and uses material prepared for the Asia Society Policy Institute (see http://asiasociety.org/policy-institute/reaching-trans-pacific-partnership-agreement-perspectives-asia