US free trade move a big step, say exporters

United States confirmation that it will start negotiating entry to the Trans Pacific Partnership (TPP) - with new trade flows for New Zealand - is a significant step, meat industry groups say.

President Barack Obama, in his first major trade initiative since taking office, announced last month in Tokyo that the United States would negotiate to join the Trans-Pacific Partnership (TPP), a regional free trade agreement that already includes Chile, Singapore, New Zealand and Brunei.

He has now formally notified Congress that the United States sees the talks as a chance to set the standard for 21st-century trade agreements.

Australia, Peru and Vietnam also want membership in the agreement, which supporters say will help ensure that the United States is not left out of regional trading arrangements in one of the most dynamic regions of the world.

The first round is due to start on March 15 in Australia, which already has a bilateral free-trade agreement with Australia, something New Zealand has been unsuccessfully seeking for years.

The Congressional notification from the United States Trade Representative, Ron Kirk, of intent to negotiate TPP, is a significant step towards trade liberalisation within the Asia Pacific region," said Meat and Wool New Zealand chairman Mike Petersen.

"The complexity of TPP negotiation becomes quickly apparent when the interests of eight participants require consideration," he said.

"New Zealand is joined at the TPP negotiating table by the US, Australia, Singapore, Brunei, Chile, and Peru, with Vietnam joining initially as an observer with a view to full participation.

"Many will try to characterise this as a bilateral agreement for New Zealand with the US, but it is much more than that," said Petersen.

"The TPP has the potential to deliver new trade flows in the powerhouse Asia/Pacific region.

"Different options to achieve this have previously been promoted but TPP has the potential to deliver a big prize through its "ground-up" approach of like minded countries working together".

The US economy was the biggest in the world with a large number of affluent consumers: it is NZ's largest beef market taking 171,000 tonnes (47 per cent of the nation's beef exports) for the year ended September 2009 and it generated $793 million (42 per cent of the value of those beef exports).

"By global trade standards New Zealand already enjoys good access to the US but there will still be significant benefits for our sheep and beef farmers," said Petersen. Meat and Wool NZ had contributed to strengthening trade opportunities through its presence in the US for over 50 years, he added.

Meat Industry Association chairman, Bill Falconer said the industry's commitment over a long period of time to strengthening relationships and building a platform of support in the US for a regional trade agreement of this nature was justified.

- NZPA