Making sense of the TPP end game

There’s an old Peggy Lee song – “If that’s all there is, then let’s keep dancin’”.

That essentially was how the TPP negotiations ended up in Maui.  The deal on the table was insufficient so Ministers decided to keep on talking.

How did this happen?  Going into Maui there were still significant issues to be addressed.  In particular, from a purely New Zealand perspective, there had been no engagement from Canada on market access for dairy and the bilateral negotiations between the United States and Japan had not been fully revealed.  Other participants had their own issues (cars, sugar, rice) and no-one was ready to tackle other significant issues like intellectual property until market access was settled (so much for those who say TPP isn’t really a trade deal!). It was somewhat ironic that it was Mexico which finally scuttled the chances of a conclusion at Maui – precisely (and probably quite rightly) because it felt its interests in the motor vehicle supply chain were not being adequately addressed by the US and Japan.  Whether cars or dairy, it is not feasible for major exporters to conclude an agreement with totally unsatisfactory outcomes.

Where to from here?  The Maui outcome does not spell the end for TPP. Far from it.   Progress was reported in a number of areas including previously contentious ones like investment and the environment.  The latter is a big win for TPP – the first FTA ever to have binding environmental obligations.  There are now fewer outstanding issues on the table.  If negotiators and Ministers can get together soon – hopefully before the end of the month – the momentum can be maintained and any backsliding from what was agreed in Maui can be prevented.  The longer it takes to re-engage, the harder it becomes.  The Canadian election now called for 19 October is a complicating factor.  Leaving the re-engagement until APEC until November would not be a good sign.

Is there anything in it for New Zealand?  Yes of course. A substantive outcome on dairy, granting significant new access to consumption in TPP economies must be part of any final deal but New Zealand stands to benefit across the range of our export industries. In just four products (beef, horticulture, seafood and wine) we pay tariffs of $130 million a year to TPP members.   We can save this and there will be new trade as well.  The Government continues to reassure us that the adjustment required in sensitive areas like pharmaceuticals or patents can be managed.  But the big prize from TPP is being part of the new rules for trade and investment in the region that takes 70 percent of our exports – can any New Zealand  Government seriously afford to turn away from this?

This post was written by Stephen Jacobi, Executive Director of the NZ International Business Forum (  Further commentary on the TPP outcome from Maui can be found here.