TPP – a prize worth the effort

by | Sep 15, 2015 | Trade Working Blog


By Stephen Jacobi

Few trade agreements have generated as many column inches – or as much protest – as the Trans-Pacific Partnership.

The recent meeting of TPP Ministers in Maui represents an important turning point in the quest for this complex agreement. Ministers succeeded in significantly narrowing the remaining issues – of which market access, intellectual property and investment are among the most important for New Zealand.

Our economy is built on trade, yet we face ludicrously high tariffs on agricultural products in a number of markets, including Japan, Canada and the United States.

What’s more as economies become increasingly integrated and inter-connected, trade and investment are changing. The focus is shifting from goods, to services and investment, and the speed and cost of doing business. The time has come to put tariffs to bed and concentrate on issues like investment, supply chain connectivity, regulatory alignment and innovation.

Back in 2011 TPP leaders committed to concluding a “high quality, ambitious and comprehensive” agreement. From a New Zealand perspective, this means an agreement that, over time, results in tariff elimination for all products, with all participants sharing equally in the benefits. Timetables and safeguard arrangements may vary, but there should be no exceptions.

For New Zealand the crunch point relates to dairy products, which represent some 25% of our exports. The question is whether New Zealand is able to gain access to a meaningful share of dairy consumption in Japan, Canada, the United States and Mexico and under what conditions.
Dairy is to New Zealand what motor vehicles are for Japan, wheat and grain for Canada, textiles for Viet Nam but with one major difference – global dairy markets are even more plagued by high trade barriers. New Zealand cannot be expected to accept an outcome on dairy that is significantly inferior to what others receive for their products of major export interest.

But dairy isn’t the only issue. Tariffs paid to TPP economies in just four sectors – beef, horticulture, seafood and wine – amount to more than $130 million a year. It is also important to remember that other participants have significant unresolved market access issues – Australia on sugar, Viet Nam on textiles – while products like rice and motor vehicles continue to be problematic.

Much concern has been raised about intellectual property, with wild rumours circulating about software patents and illegal downloads. Much of this has proven to be misinformation. The advice of New Zealand negotiators is that TPP largely upholds the status quo in New Zealand, except in the area of copyright where the current term of life plus 50 years may be extended.

On the question of medicines, the Prime Minister has said that the role of Pharmac will be protected and that where increased patent terms or longer protection of data for new generation biologic medicines results in increased costs, there will be additional funding and New Zealanders will not pay more for prescriptions.

With regard to investment, the Government advises there will be protections for the continuing right to regulate regarding public health and the environment, and the Treaty of Waitangi will be fully protected. Provided the text is well drafted, the risk to New Zealand from future investor state dispute settlement should be minimal.

Nor will TPP be thrust upon us in secret. In New Zealand, established constitutional practice for all treaties – including TPP – is that the text is concluded and signed by the Government. Before the treaty can be ratified, the text will be published and scrutinised by parliament. Anyone with concerns will have the opportunity to make submissions to the Select Committee.

TPP may not be the long hoped-for ‘big bang’ for trade and investment liberalisation, but nor will it be the Armageddon for domestic sovereignty and policy making that some would have us believe.

TPP represents an extraordinary attempt on the part of twelve governments to deliver a more seamless environment for business. It is more than the sum of its parts: beyond dairy products, beyond motor vehicles, beyond intellectual property, what is at stake is the future of economic integration in the region.

That makes the potential prize of TPP worth the effort.


Register to stay up to date with latest news, as well as saving and discussing articles you’re interested in.

Latest News


Perhaps a cyclone was after all a fitting backdrop for the meeting of the APEC Business Advisory Council (ABAC) which was held in Auckland on 12-14 February – the global environment against which the meeting took place is decidedly stormy.  In the event the wind...


As I write this end of year dispatch, NZIBF is preparing to host the first meeting for 2023 of the APEC Business Advisory Council (ABAC).  We are looking forward to welcoming the 200 or so business leaders and senior officials from APEC member economies across the...

NZ Herald: Time to lift our game in India

Following his recent visit to India our Executive Director Stephen Jacobi penned this article advocating a more strategic approach to the further development of the relationship. The article was published by the NZ Herald on 9 December.

APEC Rolls out Priorities for 2023

Issued by the Informal Senior Officials’ Meeting - Honolulu, The United States, 13 December 2022 Aiming to provide tailwinds for member economies to strengthen recovery and resilience, as well as advance broad-based economic growth, the United States rolled out its...

NZIBF 2022 Chair Report

ANNUAL GENERAL MEETING 2022 CHAIR’S REPORT I am pleased to present my second report on the activities and achievements of the NZ International Business Forum (NZIBF) for 2022-23, our fifteenth year of operations.  At the outset I would like to thank Members for...


New Zealand business will be represented at the APEC Leaders’ Week in Bangkok, commencing 13 November, by members of the APEC Business Advisory Council (ABAC). New Zealand’s three members – Rachel Taulelei, Malcolm Johns and Anna Curzon – supported by Stephen Jacobi...

Submission to MFAT for CPTPP Review

30 September 2022 Phil Mellor Economic Division, Ministry of Foreign Affairs and Trade, Wellington (By email) Dear Phil, Thank you for your email of 1 September, seeking our comments on the three year review of the Comprehensive and Progressive Agreement for Trans...