National has seized on the split in Labour's ranks over the Trans Pacific Partnership, claiming the party's opposition of TPP showed that Labour was not ready for Government.

Economic Development Minister Steven Joyce also said the camp in support of the TPP was bigger than just former Labour leaders Phil Goff and David Shearer and that regional MPs would also support TPP.

He was commenting on the Herald story this morning revealing that Mr Goff and Mr Shearer had broken ranks with the party's decision this week to oppose the TPP.

Both said they supported it. Mr Goff dismissed the argument that the deal undermined New Zealand's sovereignty.


He said every single international agreement New Zealand signed reduced New Zealand's sovereignty in some way, as had been the case when Labour signed a free trade agreement with China.

He also said there still ways for a future Labour Government to prevent overseas-based investors from buying up New Zealand houses, such as imposing stamp duties.

Mr Joyce said that Napier MP Stuart Nash and West Coast MP Damien O'Connor would be "squirming a bit" at the prospect of having to line up against their regions' interests.

"In regional New Zealand there is an understanding that amongst the farming and business communities that trade deals like the TPP and Korean FTA are very, very important for regional New Zealand," Mr Joyce said.

He said also said the split reflected on Mr Little's leadership.

"Their big success of last year was apparently unifying the caucus and that was signaled as Andrew Little's signature success.

"What is apparent just one week into the new year is that the unification was more talk and spin than any form of burying their differences.

"What every other leader of a major political party knows is that trade is hugely important to New Zealand and what they are showing here is that they are just not ready to get ready for Government if they are not prepared to make tougher decisions that would be about supporting New Zealand's interests."

Speaking to the Herald this morning, Mr O'Connor did not join the mavericks, however.

"Andrew is making the party position known," he said.

"We've always been supportive of free trade but obviously we have concerns about this particular agreement.

He said he did not trust former Trade Minister or Prime Minister John Key "to do the best deal for New Zealand."

Mr Nash, too, is sticking to the party line: "I stand by the leader's and the caucus' decision on this."

Meanwhile Mr Little issued a statement today essentially formalising what he told the Herald last night - that he understands and accepts Mr Goff's reasons for supporting the TPP and has given him approval to break ranks.

"When the caucus met recently to finalise its position on the TPP, I met with Phil and decided that his longstanding public position was such that he would be allowed to hold a differing view."

However, Mr Little is still silent on what he will do about Mr Shearer's public statement of support for the TPP.

Mr Goff was Trade Minister when the last Labour Government negotiated the China FTA and he was instrumental in 2008 getting the United States to agree to launch TPP talks.

Former Prime Minister Helen Clark said last year it would be "unthinkable" for New Zealand not to be part of the TPP.

Mr Goff said last night that every time a country signed an international agreement, it gave away a degree of sovereignty.

"We gave up the sovereign right to impose tariffs against China when we signed up to the China free trade agreement. But it came with quid pro quos. China gave up its right to impose huge tariffs on us.

"That's what an international agreement is; it's an agreement to follow a particular course of action and a limitation on your ability to take action against the other country.

"You have the ultimate right of sovereignty that you can back out of an agreement - with all the cost that that incurs."

The TPP obliges member Governments to treat investors from member countries as though they were domestic unless exceptions are written into the agreement. Labour wanted an exception written in for investors in residential housing but National did not seek it.

Mr Goff was critical of National for choosing not to do that.

"But there is more than one way to skin that particular cat," he said. "We retained the right to make it financially undesirable or unattractive to buy up residential property in New Zealand.

"You can still impose, as Singapore and Hong Kong do, stamp duty on foreign investors."
Mr Shearer told the Herald that his position on the TPP was unchanged and "certainly after reading the NIA [national interest analysis]" that was to support the deal.

Mr Shearer would not comment on whether he would cross the floor.

Mr Goff said he had no comment to make on crossing the floor "at this stage".

"My caucus knows exactly what my views are on TPP."

Labour leader Andrew Little told the Herald last night that Labour would support tariff-reducing legislation but would oppose any measures if they undermined sovereignty, expressly the issue of selling houses to foreigners, and anything that allowed foreigners to have a say on New Zealand laws.

"As a caucus we don't support the TPPA in its current form."

Mr Little said Mr Goff had made his view known to him and to the caucus and they understood his position because he was close to the TPP.

He said the issue of crossing the floor was a matter for future discussion.

Asked if there would be any consequences for Mr Goff and Mr Shearer for supporting the TPP, he said there was an understanding about Mr Goff.

"Anybody else in caucus, that'll be a matter for myself and/or caucus."