Former Economics Editor of the NZ Herald

Single deal still aim for TPP

Minister sees need for flexibility on transition path to free trade with bilateral negotiations

Trade Minister Tim Groser. Photo / NZPA
Trade Minister Tim Groser. Photo / NZPA

Separate bilateral negotiations on market access within the Trans Pacific Partnership talks relate only to transitional paths, not to the end point of a single tariff schedule for all the partners, says Trade Minster Tim Groser.

He was responding to reports from last week's TPP talks in Brunei that Japan and the United States have opted to table tariff offers which would apply different duty levels to different countries on the same product.

This was seen as opening the possibility that Japan, for example, could offer a better deal on sensitive agricultural products to the United States than to New Zealand.

"We have already agreed among all the TPP partners that we are going to end up with a single schedule," Groser said.

"Otherwise you don't have a TPP. You would have a series of bilateral agreements. We had a big fight on this before getting it nailed down. I don't think there will be a deal otherwise."

However, New Zealand recognised the need for flexibility about transitions to free trade, Groser said.

"It would be ridiculous to expect the US and Japan, which have fiercely high protection in dairy for example, to harmonise immediately with Brunei, Singapore and Malaysia which have none."

TPP would not end up as a whole bunch of quite different bilateral agreements.

"We are absolutely clear on this. But we do understand that people have problems with this, so the transition over 10 years, or whatever it is going to take, has to offer the flexibility of different transition paths," he said.

"But during the transition there has to be commercially meaningful access."

Groser described as "extremely helpful" a letter from 37 US agricultural lobby groups, including some from the dairy industry, to the US Trade Representative Mike Froman and Agriculture Secretary Thomas Vilsack supporting a TPP agreement with no exclusions for agriculture.

Fonterra's market dominance within New Zealand remains a bone of contention, however.

The US lobbies' letter advocated core principles agreed at a meeting of US and New Zealand agricultural interests in Washington last May.

The principles, also endorsed by the major New Zealand agricultural lobby groups, include that all tariffs and other market access barriers must be phased out by the end of the negotiated transition period.

The agreement must be a single undertaking.

"All elements of the negotiation, including both tariff and non-tariff [sanitary and phytosanitary] measures, are part of an indivisible package and cannot be agreed upon separately. In other words, nothing is finalised until everything is," it said.

Groser said political will on the part of the US Administration was the key to achieving a deal by the end of the year, the timetable the TPP countries' leaders set in Honolulu in late 2011.

Trade negotiations did not have a good track record in meeting deadlines, he said, and Japan faced particular challenges, having joined the process late in the piece.

"Until my instructions are changed that's the deal. I can also see clear signs of acceleration going on."

Ministers and then the leaders of the 12 TPP countries are due to meet on the sidelines of an Apec summit early next month to thrash out an agreement.

- NZ Herald

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