John Armstrong on politics

John Armstrong is the Herald's chief political commentator

John Armstrong: Key becoming more of a player in trade diplomacy

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The Prime Minister had a very good Apec. Photo / Getty Images
The Prime Minister had a very good Apec. Photo / Getty Images

APEC leaders in free trade push, droned the front page of yesterday's edition of the Japan Times, replicating the default headline for most stories, past or present, about the 21-strong grouping of Pacific Rim economies.

Well, hello. This year's summit was not the trade world's equivalent of Groundhog Day - at least as far as New Zealand is concerned.

Glacial though any movement might seem, there was definite progress in Yokohama.

Japan's desire to drag its trade policy out of the Ice Age and drastically cut tariffs on imported food was the spur for agreement on three potential routes to creating a Pacific-wide free trade pact. Why three? To keep everybody happy, of course.

Not everyone in Apec is enamoured with one of those pathways - the Trans Pacific Partnership, or TPP.

This grouping of nine nations, including New Zealand, is fast becoming another vehicle by which the Americans and Chinese shadow-box with one another for influence.

But the TPP is where the action is. And with Japan's interest in joining, TPP was the only game in town during the five days of meetings. That put John Key right in the thick of it.

The Prime Minister had a very good Apec. Not only is he now comfortable when it comes to the niceties of trade diplomacy, he is consciously wanting to become more of a player - as much as New Zealand's size allows.

Whether he had a successful Apec will depend on whether the TPP sticks to its fundamental principle that the agreement negotiated is "high quality" or whether cracks start appearing and compromises are forced on smaller members to get Japan on board.

Key went about as far as he could in warning any watering down of the TPP's principles would be unacceptable to New Zealand, especially if it affected food products.

However, Key and his team appear to have obtained a commitment from the US that a "high standard" agreement remains the objective.

Timing may also avert the worst.

A pivotal round of TPP negotiations takes place in Auckland next month. The Americans want to unveil an agreement when they host Apec in Hawaii next November.

Japan has indicated that it will not make a final decision on joining the TPP until next June. It may well be too complicated by that stage to include Japan and it may have to wait until the TPP decides to expand its membership.

This slow progress has forced New Zealand to forge separate country-to-country bilateral deals.

Key, Trade Negotiations Minister Tim Groser and the rest of the NZ delegation were cock-a-hoop that Russia agreed to begin negotiating a free trade agreement.

This is a first for Russia - and a tribute to Groser's strategic thinking.

It is not that Russia is interested in New Zealand - a tiny market for its goods. What this country offers is the chance to demonstrate Russia can play by the international trade rules and should become a member of the World Trade Organisation.

For its part, New Zealand gets entry to an increasingly wealthy market.

All the work leading up to the announcement would have been done ahead of Yokohama. But politicians need trophies. And the attention given to Apec summits makes it the perfect place to wave them.

- NZ Herald

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