Trade gains or trade-offs

Protesters rally in a 2011 demonstration against Japan's participation in the TPP. Photo / Junko Kimura

The TPP agreement is billed as a "gold-standard" agreement for the 21st century, with a focus on trade and investment integration in the Asia-Pacific region. Eliminating tariffs and border restrictions will improve access to markets, say proponents, but the negotiations go well beyond trade to encompass "beyond-the-border" issues.

Much is made of the global nature of production and supply chains (components for many goods, such as computers, are sourced from multiple countries). There is a push to standardise rules and regulations - "regulatory cohesion" - to speed up the flow of goods and services and reduce business costs. This extends to reducing barriers to foreign investment and labour mobility.

There are proposals for co-operation in science and research and "capacity building".

Prime Minister John Key has said New Zealand won't sign unless there is substantial movement to ease barriers to our dairy and beef exports to the US (and now Canada and Mexico). A 10-year time frame on eliminating tariffs on agricultural products is realistic, says the NZ-US Council.

Opportunities are also seen for smart exporters and ideas to find new markets and niches and to add value in developing countries.

A GDP gain of US$1.7 billion ($2.1 billion, or just over 0.8 per cent) by 2025 is forecast, though Trade Minister Tim Groser is dismissive of economic modelling to quantify the gains. US objectives appear mainly strategic, giving it stronger leverage in the Asia-Pacific region where China's influence is increasing. Before Canada's entry, TPP countries accounted for just 4.2 per cent of US global trade. The entry of Canada and possibly Japan is expected to delay finalising the agreement. Exemptions will be negotiated for many sensitive issues but these raise the risk of weakening the agreement.

The biggest sticking points are agricultural protectionism and intellectual property, where the US agenda for tougher copyright and patent protections and penalties raises issues of choice and access for consumers, internet users and the creative and technology sectors. There are fears that to gain concessions for our dairy and beef exports, New Zealand may have to concede too much in this area.

Disputes provisions raise concerns that the agreement could have far-reaching implications for future central and local government decision-making and restrict sovereignty. Policy changes may risk legal action if they change the expectations of investors, e.g. foreign investment restrictions or environmental protection.

Detractors say the biggest problem is that the confidential agreement's 28 interlinked chapters will have unforeseen consequences for different sectors and there will be very limited time to seek changes between the unveiling of the draft and ratification by Parliament.