TPP deal inadequate for NZ dairy

Mexico's Economy Secretary Ildefonso Guajardo and New Zealand Trade Minister Tim Groser at the TPP talks.

Mexico's Economy Secretary Ildefonso Guajardo and New Zealand Trade Minister Tim Groser at the TPP talks.

The mood is firming towards signing the Trans-Pacific Partnership trade deal, and it would be "unthinkable" for New Zealand to walk away, according to trade experts.

But at the same time, the terms for dairy trade are still "woeful" for New Zealand, and it would be impossible to sign the TPP if that did not change.

Negotiators hope a deal could be sealed in Hawaii, by the weekend.

The TPP should add about 2 per cent a year to the New Zealand economy, according to United States economist Peter Petri.

Services, tourism and IT would make up about 40 per cent of the increase, agriculture would make up 25 per cent, and the remainder would come from investment.

The TPP region represents 792 million consumers and 40 per cent of world trade. In 2012, trade among TPP partners equalled over $2 trillion.

For New Zealand the talks were also important for future trade deals, said Malcolm Bailey, chairman of the Dairy Companies Association of New Zealand (DCANZ).

"New Zealand has a little bit of trade with, for example, Canada at present but we're not focusing on one country, it's important to keep it at a high level and talk about opening up markets generally. Although there are just 12 countries today, the potential is to add further countries," Bailey said.

Bailey and New Zealand trade envoy Mike Petersen stressed the next 48 hours were key for a successful conclusion to the deal.

But they were adamant that New Zealand should not sign up to an agreement that at present is poor for the dairy industry especially.

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"The mood is firming up to conclude the TPP now but we can't join in if the dairy deal is woeful," Bailey said.

"We're well behind where we need to be for New Zealand to sign up. The offers for dairy are nowhere near adequate and our colleagues are just as frustrated as we are," he said.

The "colleagues" he referred to were dairy representatives from the United States, Canada and Australia, who back New Zealand's views on freer market access.  

READ MORE: TPP talks stumbling on dairy hurdle

Petersen said negotiators had not lost heart that a deal would be sealed by Friday (Saturday, NZ time).

"For us access to markets is the important thing - it's not so much access to the Canadian market itself but Canada will need to move on market access for all countries in order for the dairy deal to go ahead. If Canada opens up a bit to the US, then the US will open up a bit to others and Japan will do the same - it's a domino effect that we're looking for," Petersen said.

Lobbies from both the Canadian and US pro-trade and anti-trade sides were in Hawaii.

Bailey said there was no talk about New Zealand actually walking away from the deal.

"New Zealand was one of the initiators so it's just unthinkable from our point of view to go home. It would be bizarre if the whole trade deal should retrench into a protectionist mode," Bailey said.

He conceded that there was "potential" for another meeting if there was no agreement..

Executive director of the New Zealand International Business Forum, Stephen Jacobi, said even if there was agreement this week, there were still hurdles to overcome because each signatory had to ratify the deal.

In New Zealand's case it would have to be debated in Parliament, then implementing legislation would have to go to a select committee before it was passed into law.

The US had the most elaborate ratification procedures. It could take a year before it passed those, but it was unlikely the pro-trade lobby would want to take that long because they would want to get the deal out of the way before the elections next year.

 - Stuff

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