NZ should be proud of its leading role in global trade liberalisation

Sitting around the big table in Brisbane this weekend, the 20 leaders should take a good refreshing breath of the Pacific air, and drink plenty of the water. They know there is something happening around this ocean, they are all watching the Trans-Pacific Partnership.

It must be something to do with the ocean. When you look at Latin America, a multi-state continent washed by both the Atlantic and the Pacific, there is a striking difference between the nations on each side. Chile, Peru and Mexico are in the TPP and Colombia is also an open liberal economy now.

On the other side, Brazil, Argentina and the others belong to a defensive, protective trading bloc that is not doing them much good. Brazil is at the big table in Brisbane, along with the other "emerging" economies, Russia, India and China, that have stopped the World Trade Organisation making much progress in the Doha round.

Size gets you to the table, not economic agility. Sitting off to one side, with "observer" status at this G20, are the host country's near neighbours, Singapore and New Zealand. They, with Chile, picked the ball out of the collapsing Doha scrum 10 years ago and launched the movement that has become the TPP.


Modestly, they called themselves the "P3" and a year later the P4 when Brunei joined. The deal was open to any Pacific country that would not just remove trade barriers for goods and services, but saw the need for new international law covering the rights of investment, access to government contracts, internet piracy, health and environmental regulation and much else.

All of it could be perfectly fair and democratic under the principle of non-discrimination between foreign and domestic providers of capital, goods, services and jobs.

The benefits of trading in a global market are more obvious in a small economy than a large one. The P4 became the TPP in 2008 when the United States came in. Close on its heels, as ever, came Australia along with Peru and Vietnam. In 2010 Malaysia joined and two years later Canada and Mexico signed on. Last year Japan was cautiously welcomed.

With two of the world's five largest economies in the TPP it accounts for 40 per cent of world trade. The rest of the world cannot ignore it. The European Union has made tentative moves towards a matching "Trans-Atlantic Partnership" with the US, but too many members of the EU free trade zone have made the mistake of forming a common currency. Much of the discussion in Brisbane this weekend will involve the German, French, Italian and EU delegations. Until they can back the euro with a powerful sovereign bank, their debt crises will continue to scare the international economy, though it will seem a long way from the fresh, clear Pacific air.

Looking around the room, John Key will be watching the five TPP members at the table, the US, Japan, Canada, Mexico and Australia. New Zealand publicly questioned Japan's commitment last year and sure enough, it soon did a soft side-deal with Australia which has been susceptible to these temptations before.

With two partners on the scale of the US and Japan, the rest are at risk of being side-lined. Reports from the Apec summit in Beijing this week suggested the deal under discussion is no longer the gold standard trade agreement New Zealand diplomats have worked so hard towards. Key, who once said we would settle for nothing less, was sounding more pragmatic this week. But chances are there will be progress on the pressing questions in trade law, especially internet copyright.

That issue is far more important than the exaggerated fears about investor-state disputes that seemed to be the main reason thousands of people marched against TPP around the country last weekend.

A year ago, when WikiLeaks revealed a draft TPP chapter on intellectual property, the chief executive of InternetNZ, Jordan Carter, warned that rules under discussion would severely limit New Zealanders' opportunities to innovate, remix, create and distribute content. "We would be trading away our country's digital future."


Principles of copyright should be the same for the internet as for any medium. Copyright covers the form, or expression, of knowledge, not the knowledge itself. The distinction may be more difficult in technology industry but investment in new applications of knowledge needs to be able to capture its rewards.

If the Republican sweep of the US congressional elections last week means TPP is more likely to come to fruition at last, it will break new ground on many fronts.

Nothing makes me prouder of New Zealand than its role in world trade liberalisation.

If the TPP turns out to be no more than a marker of progress, it will be worth the effort.