Fate of TPP trade deal draws closer in the US

Tim Groser, Trade Minister.

The fate of the Trans-Pacific Partnership trade and investment pact may be known as early as next Wednesday, United States time, after a vote in Congress endorsed the elusive "fast-track authority" President Barack Obama needs if the 12-nation negotiation is to be concluded successfully.

However, the next few days will be a "swirling mass", says New Zealand Trade Minister Tim Groser, who concedes that even if a Senate vote, probably as early as next Wednesday, confirms "fast-track", New Zealand has yet to see its most important sector, the dairy industry, formally included in the agreement.

TPP promises to tie together about 40 per cent of world trade and would represent New Zealand's first free trade agreements with three of the world's largest and most agriculturally protected economies - Japan, the United States and Canada.

But Groser indicated NZ might have to settle just for seeing dairy products included in the agreement.

"We can't join TPP if it were to exclude dairy products, but I don't for one minute believe that's the issue.

"The issue is - how big a deal?"

Japan and Canada, who with the US are the biggest opponents to a dairy deal, have also said they will not negotiate TPP to a conclusion unless the US grants the President fast-track authority, thus preventing the US Congress from picking a multi-country deal apart on the floor of the House of Representatives.

TPP is widely politically opposed because of fears about its entrenchment of investor state dispute settlement provisions, allowing corporations to take Governments to quasi-legal arbitration if they object to policy changes, and its treatments in areas such as intellectual property and medical procurement.

"This is an open poker game ... and different chips are being put on the table ... [but] we've taken a very important step forward," Groser said.

A successful Senate vote would "unlock the end game for the TPP".

"The stakes are very high here for the United States," he said. "Is the United States going to play a leadership role in global trade in the first quarter of the 21st century or not?"

Failure to secure fast-track, also known as TPA, would not only jeopardise TPP but also the US' attempt to create a similar deal with the European Union, known as the Trans-Atlantic Trade and Investment Partnership, or TTIP.

Without fast-track authority, the US could "kiss goodbye" to TTIP.

While the 10-vote Congressional majority appeared slender, Groser said he had been assured by US Trade Representative Mike Froman that it had passed "comfortably", with many Democrat members of the Congress voting tactically to oppose it to protect trade union support and funding in their own electorates.

"A game of chicken goes on, where people, who know that it's strongly in the US' national interest to support this international trade agenda, will vote against it when they can calculate that there are negative implications [for themselves]," Groser said.

Obama has argued a US failure on TPP risks ceding to its greatest geo-political rival, China, leadership on how trade rules are written in future.

Assuming a successful Senate vote, meetings between chief negotiators and a ministerial meeting would be required in the next six weeks, along with coming to a landing on a deal for dairy, Groser said.

Groser said from NZ's perspective there was now "a very good deal on everything but dairy products".

"It's not to say that there's a bad deal on dairy products, it's more to say that there's no deal. We've barely started." BusinessDesk