TPP grinds inexorably on

by | Jun 13, 2014 | Trade Working Blog


It ain’t over, till it’s over, writes Stephen Jacobi

Reports of the imminent demise of the Trans Pacific Partnership (TPP) are greatly exaggerated.  While some momentum has certainly been lost in recent months, TPP is still very much a “live” negotiation and economies are re-engaging in a flurry of bilateral consultations in advance of another Lead Negotiators’ gathering in July.

It’s in the nature of trade negotiations of teeter on the brink.  TPP has not been helped by series of missed deadlines – however aspirational they may have been – and seemingly inconclusive Ministerial gatherings.  “Just do it” is a lot easier said than done when it comes to designing a new framework for trade and investment in the Asia Pacific region.  The risk from these delays is that business will lose heart and move on to other things.  This is what we have seen with the World Trade Organisation’s Doha negotiations.  That risk is real and Ministers and negotiators are well aware of it.

On the other hand a quick and dirty end to the negotiation serves no-one’s interest, especially not New Zealand’s as we push for a high quality, ambitious and comprehensive outcome, one that advances our market access needs in Japan, the United States, Canada and Mexico.  At the same time New Zealand needs to pay close attention to the other side of this negotiation – the so-called “21st century” rule-making.  These new trade rules need to be made in a way which meets the needs of our economy in terms of encouraging investment, promoting innovation, fostering competition, reducing costs and improving the ease and speed of doing business.  New Zealand has interests beyond market access even if tariffs on agricultural products are the most visible benefits from a successful TPP.  Getting this right – and in a way that avoids unintended consequences – takes time.

Politics is a complicating factor.  In Japan Prime Minister Abe, whose government is more stable than any of his predecessors, faces a significant debate within his own party about the merits of agricultural reform.  That reform is critical for his plans to rebuild the economy.  In the United States President Obama also needs to convince his own party in the Congress to give him the “fast track” negotiating authority to complete the negotiations without risking they might be re-opened during the ratification phase.

All governments need to redouble their efforts to convince a skeptical public that TPP can bring benefits. Some serious questions have been asked about the impact of TPP and they need a serious answer. Those businesses in New Zealand, including key players in the export sector, which are supporting TPP, are certainly not doing so because they want to erode national sovereignty, raise the cost of medicines, make it harder to innovate or restrict the use of the Internet. Only the Government can give assurances on these matters. Business can play its part in explaining why TPP is needed, but governments need to engage more resolutely with domestic stakeholders.

Governments also need to adjust to the new negotiating realities, which have recently been set by the United States and Japan, and match these with their own national interests.   The recent Australia-Japan FTA has set a low benchmark for tariff elimination in products of interest to New Zealand like beef and dairy products – this cannot be accepted as a basis for TPP.  If the United States has conceded to Japan that TPP might not be fully comprehensive, then as Minister Groser has suggested, these two need to demonstrate how the goal of a high quality agreement can be reached.  The US and Japan also need to be unequivocal that benefits of tariff elimination in TPP will apply to all parties. It is only on this basis that others can reasonably be expected to participate in the wider rule-making process.

Meanwhile other economies presently outside TPP continue to explore membership  Korea and the Philippines are the keenest, but even China – which chairs APEC this year – is examining how trade liberalisation including through instruments like TPP might encourage its own process of structural reform.

And lastly, in case TPP at the end of the day proves impossible to conclude – and this must always be considered a remote possibility – there are other negotiating initiatives like the Regional Comprehensive Economic Partnership (RCEP) between sixteen economies in Asia, including New Zealand, which provides another pathway to the vision of a more seamless Asia Pacific.

It’s still far too early to call time on TPP. In coming months we can expect more engagement between negotiators, quite probably more seemingly inconclusive Ministerial meetings and more protests and petitions.  That’s the nature of a complex international negotiation.


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...