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Fran O'Sullivan: McClay ready to make his TPP sales pitch

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Minister will need more than a genial personality to win trade deal debate
It's now the Government's job to sell the benefits of the TPP deal.
It's now the Government's job to sell the benefits of the TPP deal.

Trade Minister Todd McClay is not an openly combative politician.

He yesterday told the Herald he plans to take a painstaking approach to selling the case for the Trans-Pacific Partnership (TPP) to New Zealand audiences and is "not looking to rush it".

But McClay will need more than a genial personality to create a strong domestic constituency for the TPP in the months ahead where the benefits of this controversial regional trade agreement will be strongly and vociferously debated from all sides of the spectrum.

In an ideal world, his sales job would be strengthened by a World Bank topical issues staffers' report that was released from Washington last week on the "Potential Macroeconomic implications Trans-Pacific Partnership".

This report estimates that the New Zealand economy will gain a definite economic boost from TPP.

While the largest gains are expected to occur in smaller, open economies from the 12 members - like Vietnam and Malaysia (10 per cent and 8 per cent respectively) - New Zealand is expected to notch a 3 per cent increase in overall GDP by 2030 via the deal.

This is a net positive for New Zealand.

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But typically such reports have as much impact here as dropping a spoonful of blancmange into a bath tub whisked by Jane Kelsey.

New Zealand also stands to benefit strongly on the export front as a result of better access to some major markets like the US, Japan and Canada, and on more favourable terms.

Yesterday, NZ First was still questioning why McClay planned to sign the TPP deal in Auckland next month given there was no certainty that Barack Obama would get the deal ratified in the US within his presidential term.

Labour leader Andrew Little was also being lined up as a key speaker on an anti-TPP platform prior to the proposed TPP signing ceremony.

It is important to understand it is not a given that global trade - which helps to underwrite New Zealand's success - will continue to grow.

New Trade Minister Todd McClay.
New Trade Minister Todd McClay.

Growth in trade has slowed to 4 per cent annually since the GFC, down from 7 per cent on average (1990-2007).

The bank says this reflects weak global investment growth, maturing global supply chains and the slowing momentum in trade liberalisation.

"Against the background of slowing trade growth, rising non-tariff impediments to trade, and insufficient progress in global negotiations, the TPP represents an important milestone."

New Zealand also stands to benefit strongly on the export front as a result of better access to some major markets like the US, Japan and Canada, and on more favourable terms.

While such metrics will assist McClay with his sales job, the reality is the poor forecast gains for other parties - particularly the US and Australia (0.4 per cent and 0.7 per cent by 2030 respectively) - is leading to negative headlines elsewhere.

This is where trade proponents reel out arguments about the "dynamic effects" of trade to build their case.

The World Bank is a highly credible institution.

Unlike a number of other reputable institutions whose analysis of the TPP has been challenged by opponents simply because they derive funds from corporate members, the World Bank stands on a neutral plinth.

Groser will go to Washington DC later this month where he will not only be New Zealand's ambassador but a key player in building the TPP case within the forums he is most at home in - international capitals.

One of the first tasks the redoubtable Tim Groser gave McClay when he outlined what he expected from him as his understudy was to find a way to sell the trade agenda to New Zealand audiences.

Groser had focused his own compass on international negotiations, notching up considerable success particularly when it came to getting the Trans-Pacific Partnership finally agreed after years of negotiation. (Groser found the banalities of domestic politics profoundly uninspiring).

Groser will go to Washington DC later this month where he will not only be New Zealand's ambassador but a key player in building the TPP case within the forums he is most at home in - international capitals.

Behind the scenes McClay has been building relationships with key players in New Zealand.

Some of these people had built the domestic case for trade back in the early 2000s when the then Labour Government found itself in a deep funk about trade liberalisation.

This is an area that National has neglected, allowing TPP opponents to overly dominate discourse to the point where concerns about that regional deal have spilled over to poison debate on the valuable bilateral deals the current Government has signed.

Activating such support networks will be critical to McClay's success as he sets about building public support for the Trans-Pacific Partnership which he hopes to sign in Auckland on February 4 as one of 12 representative signatories.


- NZ Herald

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