Trade partnership deal entering end-game, says Groser

Tim Groser, Trade Negotiations Minister.

The chances of the Trans-Pacific Partnership being finished are now about 70 per cent, says Trade Negotiations Minister Tim Groser after President Barack Obama cleared the last hurdle in the Congress to fast-track the free trade deal among 12 Pacific rim countries.

It means that US negotiators will be able to make final offers in the firm knowledge that any final deal cannot be amended by the Congress.

"This is the key to unlock the end-game to this TPP negotiation and we're in for quite a ride I think over the next five to six weeks," Groser told the Herald.

He said chief negotiators would be working out a programme of work and where to meet. Bilateral negotiations would recommence and then the 12 countries would meet as a group for a big reveal.

"There will have to come a 'show and tell' moment in which everyone puts the whole package of these bilateral deals together and sees the overall landscape," Groser said.

But a collapse in talks was still possible.

"A 30 per cent chance of failure means it is not trivial. Things do fail for rational or irrational reasons so I am conscious failure is possible but I think it is more likely than not [to be completed]."

Passage of the trade promotion authority (TPA) also means negotiators can get down to the real negotiations on the dairy sector, which has been left until last because of its sensitivity. He said dairy was invariably left until the end, as it had been in CER negotiations and the Uruguay round of trade talks in the 1980s, because it was so sensitive in so many countries, such as the US and Canada.

"It is only at the end game when time runs out that on the deepest, most sensitive issues, it will start to deal seriously."

Asked if he expected the final deal to be anything like the declaration made in 2011 that it would be a comprehensive deal removing all tariffs off all goods he said: "I think we will get very close to that, if not very, very close in almost all sectors."

He did not think New Zealand would get it on every single tariff line "but I haven't given up on a number of dairy areas where I think that goal is attainable and then it becomes a question of, where it is politically impossible, how big a deal is there".

The most important bilateral negotiations to recommence will be between the United States and Japan. The level of ambition set between them will influence the wider negotiation.

Asked if it would be possible that a New Zealand business could be worse off relative to competitors in other TPP countries than before the TPP Mr Groser said he could not imagine a scenario like that.

"I don't think anyone is going to be anything other than, at worst, better off but not by much."

Negotiations around investor-state dispute procedures were not yet compete.

"There's still a vital couple of tricks that have to be achieved and now's the time to do it. It is still very sensitive."

The US TPA is for six years which will help not just Mr Obama but the president elected next year.

Where it's at

• Trans-Pacific Partnership negotiations began in March 2010.

• TPP began as a free trade agreement (FTA) between New Zealand and Singapore, then became the Pacific 4 (P4) when Chile and Brunei joined.

• The US is effectively leading the negotiations.

• 12 countries are now negotiating.

• The deal includes intellectual property rights, foreign investment rules, labour and environment standards, procurement policies, state-owned enterprises and competition, and disputes procedures.

• The US wants to conclude negotiations before the August summer break.