John Key says all Apec countries should be free to join TPP

Prime Minister John Key says any country in Apec that met the standards set in TPP should be accepted into the deal. Photo / Getty Images

Prime Minister John Key last night said any country in Apec that met the standards set in the TPP should be accepted into the deal by the 12 foundation countries that concluded the historic trade deal last month.

He also suggested that Apec no longer needed to look at developing an Apec-wide free trade agreement when others could simply join the Trans Pacific Partnership instead.

"I don't think you need to reinvent the wheel," Mr Key said in a panel discussion at a CEO summit in Manila, ahead of the Apec leaders' summit.

In a perfect world, all 21 Apec members would be signed up to the same free trade deal, as would India because of its sheer size and significance.

At present TPP is confined to New Zealand, Singapore, Brunei, Chile, the United States, Australia, Peru, Vietnam, Malaysia, Japan, Canada and Mexico. China, Indonesia, South Korea, Thailand and the Philippines have expressed interest in joining.

Mr Key's comments are bound to raise some eyebrows.

The United States led the TPP negotiations, and it has been part of the US rebalance to assert its strength in the region a in face of a rising China.

A FTAAP was mooted at Apec in Hanoi in 2006 but more recently it has been promoted by China's president, Xi JinPing.

He is effectively saying, forget FTAAP. If China is willing to accept what has been negotiated in the TPP, it should join along with any other Apec country - although such a process would be two years away at least

Mr Key will meet President Xi in a bilateral meeting today and President Barack Obama in a TPP meeting.

He said that assuming the US Congress approved the TPP deal, he did not think the US would want to go back to "base one" to start negotiating FTAAP.

"I think you are better to say 'we have got an existing foundation stone and let's have other countries joining that and other economies joining that'."

Any of the 21 countries and economies in Apec could make their own decisions about joining.

"And if they do, I think the other 12 should let them in, as long as they are prepared to meet the standards that have been set."

Hong Kong chief executive Leung Chun-ying (CY) was also on the panel and was more circumspect about the TPP and the proliferation of plurilateral and bilateral trade deals.

He said it was time to "pause and reflect" because the agreements being negotiated risked causing confusion among small and medium enterprises.

He saw them as "stop-gap" deals and a "fallback position" in the absence of a solid global arrangement under the World Trade Organisation.

Mr Key said he was "ever hopeful" about the World Trade Organisation.

"But the last successful round of the WTO was Uruguay and that was nearly 20 years ago.

"It's a long time between drinks."

The three sticking points in most trade agreements were agriculture, cars and intellectual property.

Speaking about investor state dispute settlement in FTAs, Mr Key said that stipulation had been in the past four FTAs; there had never been a case against the New Zealand Government and he did not believe there would be.

Referring to the case being taken against Germany at present by Swedish state-owned energy company Vattenfall over Germany's decision to phase out nuclear energy, Mr Key said "actually the investor has got a pretty fair point".

"On the back of policy that was there, they invested a lot of money with the view ultimately to getting a financial return and it is quite within Germany's rights to change its perspective on whether nuclear power should, but actually if you are not going to be compensated for that, how and why will any international investor make those decisions?"