TPP deal gallops closer, but NZ seeks more dairy gains

"It'll be a hell of a ride. I'm not sure I could say I'm looking forward to it, but I have been trained to do this," ...
JUSTIN DEVEREUX/FAIRFAX NZ

"It'll be a hell of a ride. I'm not sure I could say I'm looking forward to it, but I have been trained to do this," said Trade Minister Tim Groser.

The latest moves by the United States Senate are a big step forward and put the prospect of a 12-nation Trans-Pacific Partnership (TPP) trade deal into the home straight.

However, New Zealand was unwilling to sign it as it stood and would seek great gains for the dairy industry, Trade Minister Tim Groser said.

On Wednesday, US lawmakers approved legislation key to securing the hallmark Pacific trade deal by a comfortable margin, advancing President Barack Obama's efforts to strengthen US economic ties with Asia.

The fast-track bill now awaits President Barack Obama's signature.

The fast-track bill now awaits President Barack Obama's signature.

The US Senate voted 60 to 38 to grant Obama the power to negotiate trade deals and send them on a fast track through Congress.

READ MORE:
* Trade talks threat to SOEs
US Senate sends fast-track bill to Obama
* What the TPP might mean for New Zealand

It was too soon for New Zealand exporters to break out the champagne if they thought better access to the US for New Zealand goods and services was just around the corner, Business NZ chief executive Phil O'Reilly said.

"We are still a wee way away from that… definitely not years, but months away," he said.

New Zealand might send more exports under a TPP, but it could be the same volume at a better price. 

The TPP should improve access for New Zealand goods like dairy and meat to key markets such as the US and Japan, but it could take some time for tariffs to come down.

So the prospect of a trade deal would not rescue the dairy sector from low returns this year, but could give confidence about future prospects and encourage investment. 

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And the TPP was about a wide range of business from high tech to services and investment, not just greater exports, he said.

"Because nobody has been clear about whether the US was able to play, and negotiate … the sharp end of the deal. And now they can," O'Reilly said. The door was now open for the US to talk about "best offers" with the likes of Japan and Canada.

But he warned that if it was held up, the deal could get caught up in the US presidential election process later this year.

New Zealand might send more exports under a TPP, but it could be the same volume at a better price. 

MAJOR HURDLES CLEARED

In Parliament on Thursday morning, Groser said that Obama may also have to negotiate a separate agreement on trade adjustment assistance, but the major roadblock preventing the deal had now been cleared.

"The balance of expert views is that he [Obama] will pass this into law very soon and it'll be on for all money," Groser said.

"It's at a very mature stage and it's put up or shut up time, for everybody.

"It'll be a hell of a ride, I'm not sure I could say I'm looking forward to it, but I have been trained to do this."

On Monday Prime Minister John Key indicated that at the current stage of negotiations, a number of export sectors would benefit from a deal, and it would be net positive for the New Zealand economy.

However, there were few gains for dairy in the current position.

Groser indicated that if the current state of negotiations was written into the final deal, New Zealand could not sign it.

"No. No, no, no [we wouldn't sign]. I'm sure we can improve on that. The deal, in terms of export gains, is shaping up, I think, very well, but on dairy ... We haven't agreed on anything because it's not good enough," he said.

"That's always the way unfortunately. We're the largest dairy exporter in the world, it is the most sensitive issue for most countries, it always has been, it's always a bloody struggle and this will be, unfortunately, no different, but we're just hanging in there and we'll try and get the best we possibly can."

Asked why he believed he could extract concessions on dairy so late in the negotiations, Groser said: "I always back myself."

Deputy Prime Minister Bill English said there now appeared to be a "serious prospect" of resolving issues facing an agreement.

"We've always been keen to execute a TPP [agreement], we think it'd be good for our economy and for the Asia Pacific region, and we'll be looking at where the final negotiations come out, but it looks to be on track to a deal we could sign."

 - Stuff

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