Stephen Jacobi: An element of the absurd as Maui endgame played out

The question is not whether dairy will be excluded from the deal, but rather the extent of its inclusion - will TPP economies allow significant access into the dairy consumption in their markets and under transparent rules?

Opinion

Endgame is a play by the absurd dramatist Samuel Beckett. It's also how the anticipated last hurrah for the Trans-Pacific Partnership (TPP) negotiations in Maui last week was described. And there was quite a lot of the absurd as pressure mounted on negotiators and the wildest speculation about developments circulated in the media back here.

Trade negotiations by their nature tend to teeter on the brink of failure and TPP at Maui proved to be no exception. Ministers have undertaken to continue to engage but it's not clear what this might mean for the prospects for completion and ratification any time soon.

As the debate continues, here's a brief guide about what to look for.

Dairy has the most potentially to gain. It's our largest export and the barriers in the US, Japan and Canada are absurdly high.

The question is not whether dairy will be excluded from the deal, but rather the extent of its inclusion - will TPP economies allow significant access into the dairy consumption in their markets and under transparent rules? Will these benefits be offered to all or will there be better access for some?

Other goods should not be overlooked. In just four major exports - meat, horticulture, seafood and wine - there are annual tariffs paid of at least $130 million.

If other products are added (forestry, manufactured goods), and with some even partial gains on dairy, the benefits from elimination would be significant. This is not new business, which could occur under lower tariffs, or overall economic impact, just money saved.

Then there is the impact of commitments on services exports - education, tourism, professional services (engineering, ICT, software) and financial services.

Other goods should not be overlooked. In just four major exports - meat, horticulture, seafood and wine - there are annual tariffs paid of at least $130 million.

On investment the extent of protections for overseas investors, including New Zealand companies investing overseas, will be closely scrutinised, along with their right to seek compensation when expropriation of assets is proven, balanced by continuing exceptions for regulation to promote public health (including in respect to tobacco), the environment and the Treaty of Waitangi, and to make decisions under the Overseas Investment Act.

On intellectual property New Zealand has interests to promote - our creative industries and some IT exports could benefit from better IP protection internationally - as well as some clearly identified risks to avoid.

Generally the Government will want to hold, to the greatest extent possible, to existing policy in respect to medicine pricing, the role of Pharmac, patent terms and extensions including in respect to biologic drugs and to software, copyright, geographical indications, parallel importing and internet file downloading.

This is not to suggest that some changes to existing policy might not need to be made.

The US press has pointed to the value of the first FTA to include binding environmental provisions which protect endangered species.

New Zealand has always championed the elimination of fish subsidies.

Some will argue that what is now realistically on offer is significantly less than the bold vision for TPP outlined at Apec in Honolulu in 2011. They are right. That is deeply disappointing for negotiators and business alike.

"High quality, ambitious and comprehensive" was how TPP was begun and should guide its ending.

What the process has showed is that there are protectionist and anti-competitive forces at work even in the most open of trading economies.

That inevitably means that, despite the absurdities, negotiators and their business allies will have to pick themselves up in the aftermath of Maui and return to the continuing task of building a more seamless economy in the Asia Pacific region.

Stephen Jacobi is executive director of the NZ International Business Forum.