Trade Negotiations Minister Tim Groser is warning that Japan could be "left behind" if it doesn't sign up to a high quality Trans Pacific Partnership deal.

In a keynote speech in Tokyo today to the Nikkei Forum he said there was increasing interest from China in the TPP, being negotiated among 12 countries, and it could lead to a bigger regional free trade deal.

He also conceived of a situation in which the TPP failed: "Though TPP may yet stumble if Governments finally lack the courage to take final decisions to confront their highly protected sectors, there is every reason to believe TPP will be the decisive influence in creating the entire FTAAP or Free Trade Area in the Asia Pacific."

If it did fail, he thought another less developed set of trade talks in which New Zealand is involved, the Regional Comprehensive Economic Partnership, involving China but not the United States, would take leadership of the regional integration process, possibly in a two-speed process, implying one would be for ambitious trade liberalisers and another speed for the countries not able to ''move forward."


He said that as the TPP negotiations progressed, the existing free trade agreements among many of the participants were effectively "collapsing into one mega-regional trade deal, TPP."

"There is an important message here for any negotiating partner that finally decides they cannot accept the final result of the negotiations. They could be left behind."

"Japan has so much to gain from TPP by being what I call 'on the TPP bus,'" he said.

"If successful, the 'TPP bus' will pick up passengers at the Tokyo station but this is not it's final destination."

The TPP bus, if negotiations were completed, would carry on to other Asia Pacific destinations.

Japan, Canada and Mexico entered the talks after the United States made its move. Others, notably Korea, the Philippines and China could follow, Mr Groser said.

The TPP countries are in order of joining are: New Zealand, Singapore, Chile, Brunei, United States, Australia, Peru, Vietnam, Malaysia, Mexico, Canada and Japan.

Japan has a highly protected agricultural sector with an uncertain future given that less than 10 per cent of its full time farmers are aged under 65.

The TPP market access part of the talks have evolved into a series of bilateral negotiations with the critical one being between the US and Japan.

Mr Groser said Japan's agricultural sector had a lot to gain from TPP, not competing on cost but on the quality of its produce.

Asia Pacific consumers were more concerned with food quality and safety than price.
"Given Japan's role both in the world economy and in international trade, it would be inconceivable for us to fail at this juncture," he said.

"To succeed with TPP will require real political courage."

Speaking to the Herald from Tokyo, Mr Groser said New Zealand was willing to help Japan restructure its agricultural sector.

He was having another meeting tonight with Koya Nishikawa, the influential chairman of the TPP committee of Japan's ruling party the LDP.

Mr Nishikawa recently visited New Zealand to talk about TPP and Mr Groser also met with him in Singapore this week at a ministerial TPP meeting.

"This negotiation operates on multi-levels and these LDP senior politicians are extremely important.

At tonight's dinner meeting he would be talking to him "about what we can do to try and help their poor dairy farmers improve their appalling agricultural productivity."

"There is no future for Japan agriculture if they don't start a process of structural adjustment and we are absolutely prepared to try and help."

Mr Groser said he was also meeting the cabinet Secretary in Tokyo, Yoshihide Suga and the Minister for TPP, Akira Amari.

Mr Groser said he was 99 per cent confident that Japan's sensitive areas of dairy, wheat, rice, sugar, and beef and pork would be part of the deal: "What is now the issue is how much liberalisation?"

He conceded that the original commitment by leaders of TPP countries for a comprehensive deal was no longer a certainty.

Referring to President Barack Obama's 2011 meeting of TPP leaders in Honolulu, 2011, Mr Groser said leaders originally endorsed the "whole shooting match - complete elimination of all tariffs on everything."

But New Zealand was not yet abandoning it.

If some countries could not now live with that, they needed to put up a credible alternative.

"We are formally not going to abandon that until we know where we are going," he said.

"The danger is if you let go of the maximalist position, until there is an alternative, you slip all the way down some minimal little deal with no real interest, not just to New Zealand but to many of the countries involved."

President Obama's visit to Tokyo in April had made some progress with Japan on one or two of the most sensitive areas.

But because there was not clarity "this has led to all manner of lobbies in Washington and I suspect in Tokyo putting their worst fears on the result."

"I understand that but everyone should just keep calm and carry on."

Chief negotiators are planning another meeting in July.