The TPP has the potential to transform the economies of the 12 Asia-Pacific nations - but the devil, as always, is in the fine print.

It shouldn't take much for Tim Groser to exercise his theatrical talents and tip the chess board over and walk away from the Trans Pacific Partnership talks if New Zealand does not get a decent deal on dairy access.

The ministerial negotiations in Maui are timetabled to finish early this afternoon with a news conference to be screened on YouTube.

But realpolitik dictates that the trade minister and his boss Prime Minister John Key are more likely to opt for a sub-optimal deal rather than walk away empty-handed from the lengthy negotiations. That's because both politicians have invested substantial personal political capital in chalking up a TPP outcome.

New Zealand has a natural interest in getting to the finishing line on a race it started.


The problem is it's quite unclear whether the gains from greater access for New Zealand dairy interests in Asia Pacific markets which are currently heavily protected - such as Canada, Japan and to a lesser extent the US - will offset the impact on some of the country's other economic interests that will inevitably be affected during the TPP trade-offs.

The US did not help the dairy negotiations by withdrawing an offer it previously made to Australia for increased dairy access. The conjecture was that US Government officials could not sell the move if Canada and Japan did not also reduce their dairy barriers.

New Zealand has been playing at brinkmanship in what has been billed as the TPP endgame. But so have the other 11 nations - something which is frequently overlooked. The negotiations are not binary.

When the intention to form the Trans Pacific Partnership was first announced in New York in 2008, former Labour trade minister Phil Goff said New Zealand would pursue a comprehensive and high-quality agreement; this negotiating position was underlined when Groser succeeded him at the 2008 election.

Unsurprisingly, the partnership agreement has since morphed to provide some new rules for the economic integration which is already under way in the Asia Pacific region. But what the United States has billed as a 21st century free trade agreement has become a platform for the other nations to dance to the US playbook when it comes to complex commercial areas like intellectual property. New Zealand has largely gone along with this.

But there is little evidence in the various economic studies that have been published on TPP as to where the upside will be for New Zealand's ICT entrepreneurs and others who are leveraging the digital age.

Cabinet ministers have also not made a strong case for the TPP. It is only now as the endgame is in play that Key has fronted up and said the Government would fund any changes which bump up the prices New Zealand will have to pay for some medicines as a result of the TPP. In the past, Key has obfuscated. Fronting up makes sense when the talks are themselves bedevilled by leaks from parties seeking to overturn particular negotiating lines or advance their own interests.

Groser has had little of substance to say since the talks began.


It was left to New Zealand's agricultural trade envoy Mike Petersen to fly a red flag by telling Inside U.S. Trade that the Key Government had signalled it was willing to delay the conclusion of the deal beyond this week's ministerial negotiations. Particularly if pushing the talks out into August would pave the way to securing an acceptable outcome on dairy market access.

The US Trade Representative's office has booked a slot on YouTube for a live news conference from Maui early this afternoon - complete with a live countdown - on the outcome of the TPP negotiations. This is a useful piece of pressure tactics from the US side.

But at the time this column was written there had yet to be a breakthrough on dairy which New Zealand politicians and officials have determined is the major benefit for the country from the negotiations.

The TPP has the potential to transform the economies of the 12 Asia-Pacific nations. It can also help to progress the World Trade Organisation's multilateral negotiations which have essentially been stuck in a groove. But the devil, as always, is in the fine print.