Editorial: Sticking to our guns over TPP only way to go

Photo / File

Opinion

Local opponents of the Trans Pacific Partnership have always assumed this country was bound to accept an agreement that falls well short of the "gold standard" espoused by Trade Negotiations Minister Tim Groser. A cave-in to the United States was considered a virtual inevitability. If nothing else, the WikiLeaks disclosure of secret details of those talks suggests something very different has been happening.

It reveals that at the end of the Brunei round of negotiations in August, New Zealand and a bloc of other countries were seriously at odds with the US on many issues. This country, it appears, is continuing to hold out for that gold standard, rather than accept a silver or bronze free trade pact full of compromises and exemptions.

That is reassuring. No deal would be better than a second-rate agreement. It is also no bad thing that this leak provides New Zealanders with a better idea of what is going on. Trade talks customarily are held in secret to take political pressure out of the equation.

But the need for this can be overstated and, ultimately, counter-productive. Fears based largely on speculation can be aroused, and groups that feel they should have a role in the outcome may feel marginalised.

In Washington, this has led to 151 of the 201 Democrat members of the House of Representatives telling President Barack Obama that they will oppose giving him fast-track authority to effectively bypass Congress in approving the TPPA and any other trade agreements. This is not so much a protest at the contents of the pact as the lack of consultation by the Obama Administration.

Democrats are, traditionally, more protectionist-minded than their Republican opponents, although many of the latter are being pressed in the same direction by the Tea Party. This new stumbling block, with the wide gulf between the US and many of the 11 prospective TPPA partners, suggests President Obama's aim to get an agreement in place by the end of the year has very little chance of being fulfilled.

The WikiLeaks disclosure covers the important intellectual property chapter of the proposed pact. This is an area of considerable interest, in large part because of the US pharmaceutical industry's opposition to Pharmac, which has saved New Zealand taxpayers millions of dollars by buying cheaper generic medicines.

Intellectual property is especially important to that industry, but Pharmac's role should not be problematic. It does not breach patents; it decides what medicines will be bought by the public purse. Other medicines are available but unsubsidised.

Not only does Pharmac not represent a breach of free trade principles but it has been too successful to be a victim in any final agreement. It is, therefore, comforting that Canada, Singapore, Chile, Malaysia and Vietnam have joined New Zealand in proposing rules that would avoid blocks to generic medicines.

The American response, however, has been to continue to push the pharmaceutical companies' cause, most recently by proposing that developing countries will be given a phase-in period if they accept US-promoted rules.

If New Zealand sticks to its guns and Pharmac is a deal-breaker, so be it. But the WikiLeaks' disclosure points to a lot more issues being unresolved. In many cases, the US and this country are opposed to each other's proposals, usually with several countries supporting New Zealand. If progress cannot be made at forthcoming meetings at Salt Lake City and Singapore, there is a danger that American interest, in particular, may start to wane.

If so, bilateral pacts or a smaller Pacific agreement, perhaps much along the originally envisaged lines, may be the outcome. That more modest result would not represent failure if a gold standard was, indeed, achieved.