TPP critical for our future trade ... it's a pity the idea hasn't been sold to the public

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President Obama's support for the TPP has waxed and waned.
President Obama's support for the TPP has waxed and waned.

If the "West" doesn't get to shape the chess board on which Asia-Pacific economies play - China will. That's the underlying driver behind Barack Obama's quest to get the Trans Pacific Partnership (TPP) finalised before his presidency enters the "lame duck" period.

It's also why New Zealand was a key mover in getting TPP talks under way in the first place. Although New Zealand's political leaders tend to gloss over this salutary truth so as not to be seen to cock a public snoot at the world's largest economy which also happens to be our largest trading partner.

Some things - including the alleged "spying" the Government Communications Security Bureau is claimed to have undertaken on a link between the Chinese Consulate and Visa Office in Auckland - are best left unsaid.

But the reality is that in a world where a nation's secrets are no longer safe - as with the publication of National Security Agency files affecting New Zealand that former NSA contractor Edward Snowden gave to local journalists - our politicians have to operate on more difficult terrain than their predecessors.

The task requires considerable skill, persistence and openness.

But when it comes to TPP, cabinet ministers from the Prime Minister down have been remarkably silent as the endgame gets into full swing in Washington, where Obama is seeking approval to negotiate a deal that will stick.

The President's own support for the TPP has waxed and waned. But US participation is critical. Without it, other major nations such as Japan may not stick with the process.

Twelve nations - including New Zealand, an early spear carrier for TPP - will be united in a major Asia-Pacific regional "free trade" agreement covering 40 per cent of global trade if their negotiators can reach agreement.

It has been a difficult negotiation because TPP is not purely a trade agreement in the traditional sense, where the trade in goods and services is liberalised so that, for instance, New Zealand's exporters gain greater access to other countries in return for lowering barriers at home. That style of "free trade agreement" made sense 20-30 years ago. But in a post-globalisation world where much business takes place within increasingly dominant global supply chains, the case for reorienting the region's commercial standards and rules to fit the real shape of business today is a strong one. Jobs which once sustained global middle-classes are disappearing. Cheap labour is no longer a major competitive advantage. Even in China - which is embracing innovation - the drive is away from being the world's factory.

This reality is frequently glossed over in a local environment which ignores the gains that New Zealand might achieve through TPP and concentrates on the downside, such as potential changes to the Pharmac programme.

New Zealand's trade negotiations have traditionally been dominated by agricultural interests.

But for TPP to be successful other sectors such as high-tech and services need to come to the fore.

John Key and Trade Minister Tim Groser have made sure that major segments of the economy, particularly agricultural exporters, have been briefed on potential tradeoffs throughout this lengthy negotiation. But the case has not been strongly made to the public.

Groser has deputised Associate Trade Minister Todd McClay to deepen the domestic constituency for trade. But McClay will be playing in a highly politicised pool.

The last time a trade minister engaged deeply in a domestic sense was during the early years of Helen Clark's Government, where a broad Trade Liberalisation Network was launched to help build domestic support for open borders.

That case needs to be remade.

So to Obama who scored a win this week when a US Senate panel voted to give him 'fast-track powers' to present trade deals that the Congress can either accept or reject but not amend. He sealed the double when a key congressional committee also voted (narrowly) in favour of the renewal of Trade Promotion Authority (TPA).

But Obama still faces a treacherous way ahead to gain sufficient support for the TPA.

"My top priority in any trade negotiation is expanding opportunity for hardworking Americans," he said.

"At the moment when 95 per cent of our potential customers live outside our borders we must make sure that we, and not countries like China, are writing the rules for the global economy."

Those rules, which include the law of contract, protection for intellectual property and fair labour laws are also critical to the New Zealand ethos. Pity that the politicians do not take the case to the public.

Debate on this article is now closed.

- NZ Herald

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Head of Business for NZME

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.

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