Kim Campbell: Trans Pacific Partnership about more than trade

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For the first time Japan has signalled a willingness to engage on agricultural access to Japan's food markets.
For the first time Japan has signalled a willingness to engage on agricultural access to Japan's food markets.

The drawn out Trans Pacific Partnership negotiations are about much more than freer trade access with the United States and the other countries alone.

In the first place, free trade agreements are a function of our relationships with the other countries involved.

The fact that under them our officials can sit down with their counterparts across the Pacific to talk about major trade concerns, rather than impose unilateral, ad hoc regulations without consultation, speaks volumes about the maturity and strength of our international relationships.

The TPP in particular is about what the partnership means in a wider strategic context, and less what is said in the text of its documentation.

Though largely unheralded, the Wellington declaration in November 2010 fundamentally altered New Zealand's relationship with the United States by establishing a foundation for raising discussions on all manner of issues.

After it was signed by the Hon Murray McCully and Secretary of State Hilary Clinton, the US commitment to the TPP became far firmer.

New Zealand has strong, historical and cultural bonds with the US that are different from, and at least as important as, those we share with any other nation. Those bonds are also just as symbolic. We can add technological ties too, since we also rely on US technical and engineering innovation.

Bilateral trade agreements often result in the forging of closer relationships between the two countries involved well beyond the trade itself, but that hasn't been the experience with multilateral negotiations, such as those of the stalled Doha round of the WTO talks.

However, closer ties will be forged between the countries involved in the TPP because the agreement presents a useful forum to deal with sensitive matters which have cultural factors associated; matters such as security, air and sea corridors, and other difficult to discuss issues like phytosanitary standards and practice.

New Zealand and Australia have proved the value of the bilateral model with the Closer Economic Relationship (CER), now the Single Economic Market (SEM). Both countries are still enjoying gains under its provisions.

CER began with our two countries talking about lowering the quota for the transtasman trade in footwear. Thirty years later we are talking about capital flows, shared superannuation and the free flow of tax.

The runaway success of our FTA with China - a trebling of two-way trade in five years - is as much to do with its symbolic power as the reduction in duties at the border required under its terms.

The perception of China's traders upon the signing of the FTA bestowed a special and privileged preference, a licence if you like, to do business with New Zealand denied to other countries.

Now Japan's entry to the TPP has changed its potential impact profoundly. For the first time Japan has signalled a willingness to engage on agricultural access to Japan's food markets. Hitherto that may as well have been a brick wall.

Japan's joining the talks is most positive for New Zealand and the other partners both directly and indirectly.

It gives the US a welcome bone to chew on and a far bigger stake in the TPP outcome, because it has long wanted freer access to Japan's markets for its agricultural products, just as we have.

The TPP also presents a means for the US to contain China's influence in the Pacific and farther afield, though the general view of the TPP partners is that China will also be invited into the partnership in due course.

With freer TPP trade tantalisingly near, and the larger prize of closer relations with the other 11 signatory countries in the offing, how soon is it likely to be signed off? From what I gathered in Washington in May, the terms of the partnership may not realistically be completed this year, but there is every reason to expect they will be by mid 2014. The US is certainly talking when, not if.

To cement our relationship with the US, which is more important than ever, and with Japan in on the deal, the advent of the TPP could turn out to be a game changer for us, global trade and a more secure world.


Kim Campbell is chief executive of the Employers and Manufacturers Association.

- NZ Herald

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