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Home / Business / Companies / Retail

Toby Manhire: Glass half empty - even with ABs milk

Toby Manhire
By Toby Manhire
NZ Herald·
24 Sep, 2015 09:30 PM5 mins to read

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It comforts me to imagine Groser breezing into the Coca-Cola capital of Atlanta with a crate full of All Black milk, leveraging that World Cup spirit.

It comforts me to imagine Groser breezing into the Coca-Cola capital of Atlanta with a crate full of All Black milk, leveraging that World Cup spirit.

Toby Manhire
Opinion by Toby ManhireLearn more

Football manager Sir Alex Ferguson used to describe the crunch final weeks of a season as "squeaky bum time".

And so it is around the Trans-Pacific Partnership negotiating table in Atlanta, where representatives of the 12 participating countries regather this weekend for a last-gasp to get the trade and regulation deal over the line.

The Hawaii talks had been meant to serve up a 12-way handshake but it ended in finger pointing instead, with participants blaming others for stalemates on automotives, pharmaceuticals and dairy.

New Zealand's trade minister, Tim Groser, emerged looking flummoxed and cross. He was disappointed, he told Q+A's Corin Dann, but "relieved that we were able to avoid a situation of New Zealand essentially being thrown out of this negotiation or accepting a completely suboptimal deal on our number one export".

Hope was not lost, he added, but in light of the US gearing up for a presidential election the timeframe was "very, very tight"; there was "a very strong shared informal understanding that this has got to be done in weeks, not in months".

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That interview took place seven weeks and five days ago " about as close as you'll get to a measure of months. Deep into squeaky bum time.

As Groser and Prime Minister John Key have stated repeatedly over the years, they have no interest in any deal without major gains in dairy access. New Zealand has been dubbed the "Saudi Arabia of milk", but that may not be the most helpful slogan given flying sheep and agrihubs. For a more upbeat and topical comparison, Bill English has likened the dairy sector, which accounts for about 20 per cent of exports, to the national rugby team. Who'd want to diversify away from success, he said.

"It would be a bit like asking why New Zealand does not diversify from rugby because the All Blacks are too successful. We have got all our eggs in the All Black basket."

As if to complete the metaphorical circle, Fonterra's biggest milk brand has lately come in World Cup-themed All Black (and all-black) plastic bottles. It comforts me to imagine Groser breezing into the Coca-Cola capital of Atlanta with a crate full of All Black milk, leveraging that World Cup spirit. Who's to say he won't even be wearing full All Black kit, if not All Black nappies, as he pours that All Black milk over the All Black Weetbix around the negotiating table?

But even if he were to crank up the rugby-themed theatrics - and by God I hope he does - Groser faces an uphill battle. The differences over pharmaceutical patent terms are reportedly close to being resolved and the automotive wrangling is inching forward, but there are no chinks of compromise on dairy.

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Groser and the Prime Minister, who will do his best to lobby other leaders on a UN visit next week, are busy wheeling back the earlier assurances and working on expectation management.

New Zealand remained "a long way from being in the best place we could on dairy," Key said this week, but "at least it will be the very best we can do" " which sounds like something my mother might have said to me before I chugged off to run the school cross-country.

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Tim Groser's irate dismissal of TPP criticism does him and his cause no favours. Photo / Ben Fraser
Tim Groser's irate dismissal of TPP criticism does him and his cause no favours. Photo / Ben Fraser

The chief impediments to a dairy breakthrough are Japan, where hundreds of dairy farmers have been protesting against change, and Canada, where any deal is complicated by the fact they are in full campaign mode, with an election to be held in just over three weeks. Prime Minister Stephen Harper has already been attacked for giving way in negotiations over the auto sector, with opposition leader Tom Mulcair branding him "the world's most incompetent negotiator" and warning against "selling out" farmers in response to access demands from New Zealand and Australia.

New Zealand's great negotiating snag is that, having unilaterally deregulated just about everything, there's little left to barter.

"I don't know whether people thought we were bluffing or not," said an exasperated Groser after Hawaii. "But, of course, we were never bluffing."

The trouble is, there's not a lot of point in bluffing if you're obviously not holding any cards.

Such is the combined pressure of competing demands, impending elections and other domestic squabbles that Groser's prediction 10 days ago that a deal by the end of the year was "90 per cent certain" looks wildly optimistic.

But even if the TPP were to make it across the line in some form, Groser and Key face another steep challenge to their powers of persuasion.

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Groser's irate dismissal of those who protested over the TPP deal as a mix of extremists and idiots does his cause no favours. Among their number were scores of medical practitioners worried about the effect of the deal on Pharmac, as well as tech sector professionals alarmed at the implications of the intellectual property chapter " hardly the dullard knee-jerk anti-capitalist stereotypes Groser would have us imagine.

Numerous other legitimate objections have been voiced by critics, including the nebulous investor-state dispute structure. It certainly takes the cake for Groser to pillory protesters as ignorant of the deal when they are protesting precisely because they have been kept ignorant of the deal.

Given Groser's propensity to engage with the public in the manner of Gargamel cursing the Smurfs, Key may well decide, should a deal be done in Atlanta, that the trade minister would be better to focus on commitments abroad, while he and Bill English argue the case at home. Of course there will be benefits for a small country in being part of a trade deal encompassing 40 per cent of annual global economic output, but they are neither inevitable nor to be taken for granted. For the moment, the New Zealand Government appears to be losing the argument on every front.

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