Groser pointman at key time in world trade

The US House yesterday approved legislation to give President Barack Obama authority to conclude the TPP deal. Photo / AP

Trade Minister Tim Groser has long been tipped by Wellington's euphemistically labelled "beltway" to be New Zealand's next ambassador to Washington.

The Beehive game plan was for Groser to shed his ministerial post once the controversial Trans-Pacific Partnership (TPP) negotiation was concluded and head off to the United States to spearhead New Zealand's presence in the world's prime superpower.

This would place the "uber" diplomat doing what he does best on the international circuit and clear the way for another National Cabinet Minister to step into the trade portfolio, make the nuts and bolts deals to conclude outstanding free trade negotiations and deal with trade disruptions.

Suggestions have since emerged that Groser's ambassadorial role will be twofold. The Wellington drum is that he will also remain involved with international climate change negotiations in a senior role representing New Zealand.

This would see Groser - who is expected to be posted to Washington this year - remain a player at the United Nations Climate Change conference in Paris in early December where nations will endeavour to negotiate a legally binding agreement to further reduce greenhouse gas emissions.

It will also ensure that he remains in a bridging role between major interests at a time when regional geo-political power is in flux with China ready to insert itself as Asia-Pacific leader if the US drops the ball on TPP.

So far there has been no public confirmation from either the Prime Minister, Groser or the Ministry of Foreign Affairs and Trade (Mfat) over the proposed plan.

There are now complicating factors.

Yesterday the TPP came another step closer when the US House of Representatives narrowly approved legislation to give President Barack Obama the authority to close the TPP deal. This after last week's rejection of a comprehensive package which also included trade adjustment assistance which was a big slap in the face to Obama.

The trade promotion authority legislation must go back to the US Senate for ratification next week. But it could still come unstuck again if sufficient Democrats resist the White House's arm-twisting and vote it down.

Groser makes it clear that the end game negotiations for TPP can't get under way with any degree of certainty unless Obama has the authority to conclude the deal.

His view is shared by other Asia-Pacific trade ministers who do not want to waste their own precious negotiating capital to forge an agreement which could then end up being relitigated in Washington if Obama does not have the authority to conclude a deal which would be presented to Congress for a "yes" or "no" vote.

It is a pivotal time for world trade.

China had been preparing itself to seek accession to the TPP agreement. Chinese political leaders see the stringent business rules contained within the TPP negotiating platform as providing a useful mechanism to further help China's transformation into a fully-fledged market economy.

The rival Regional Comprehensive Economic Partnership (RCEP) - as currently conceived - does not provide that platform.

But Obama's decision to openly try and get congressional votes by making TPP sound like a US-led containment measure for rising Chinese power has not gone down well in Beijing.

Groser is now predicting a global power shift if China emerges to fill the vacuum in the leadership of regional trade through the negotiations on the competing RCEP to which New Zealand is a participant but the United States is not.

China has already been increasing its regional power through the establishment of the Asian Infrastructure Investment Bank (AIIB) to which New Zealand was the first founding Western member.

It has also signalled a desire to see the US dollar toppled from its perch as the global reserve currency.

All this calls for delicate footsteps as New Zealand tries to keep a foot in both camps.

Right now, the experienced senior diplomat Carl Worker has been deputed to Washington to stand in for current ambassador Mike Moore while he continues his recovery from a recent stroke. Moore is said to be making good progress.

Worker's most recent post was as ambassador to China. But he is also a former head of the Ministry of Foreign Affairs and Trade's Americas Division and former member of the NZ US Council executive board. It is a testing time for New Zealand diplomacy.