New Zealand is actively exploring options for both a non-US Trans-Pacific Partnership Agreement (TTP) and a bilateral trade agreement with the US, says Trade Minister and Rotorua MP Todd McClay.
"We're looking at the numbers at the moment to see what value a non-US TPP might have for New Zealand,"he said.
The TPP was effectively put into limbo when new US President Donald Trump officially withdrew from the agreement earlier this year. New Zealand, as the depository country, is the formal holder of the agreement, signed by 11 countries in February 2016, but not yet ratified.
"As the depository country we have a co-ordinating role," said Mr McClay, adding that Prime Minister Bill English had asked him to engage with a number of TPP countries.
"I'm speaking to and visiting a number of countries in the next week or two. I think there is still a lot of support for the agreement, but each country has to work out its position based on what an agreement might look like without the US involved."
There has been considerable speculation from political observers that the US withdrawal from TPP has opened the way for China to play a larger role in global trade, especially in the Asia Pacific region.
Mr McClay said he was unable to comment on what China's view of the TPP might be. But he noted that China was one of the 16 Asia Pacific nations that have been negotiating the Regional Comprehensive Economic Partnership (RCEP).
Many of those countries were also part of the TPP, but the RCEP also includes China, which was excluded from the TPP. The only country in the proposed RCEP that New Zealand does not have existing free trade agreement with is India.
"We have the next negotiation round coming up in a few weeks in Japan, and there's an opportunity to conclude that there's an opportunity to conclude that agreement this year," said Mr McClay. "What regional agreements do is create regional supply chains."
One of the reasons the Government championed the TPP was that it brought critical trade partner the US into a formal trade agreement with New Zealand. The two countries have never signed a bilateral free trade agreement.
Mr McClay said that before any progress could be made on a bilateral free trade agreement, the new administration needed to get its new trade negotiator in place and confirmed.
"The prime minister has asked me to go to Washington and see him once that has happened. Then we'll have an opportunity to talk to them about what role they're going to play in Asia Pacific and bilaterally what opportunities there are in the US for New Zealand."
A ministry official confirmed in a recent briefing to the parliamentary select committee on foreign affairs, defence and trade, that it had a "24-hour watch" on the new American administration to stay on top of policy moves.
Bay of Plenty MP Todd Muller. Photo/File
Bay of Plenty MP Todd Muller, the select committee chairman, said it made sense for the ministry to use its resources to closely track US policy as it transitioned to a new administration, given the substantive changes that were coming to the fore.
"We need to ensure we know as much as we can on how this is unfurling for New Zealand and how best to respond to it," he said.
"But we have to be aware of the distance we are from the US and their political priorities at the moment," he said.
"That does not mean in any way that we shrink back to holding the view that world trade is better for being more open. We'll continue to push that hard at every forum."
Mr Muller said that given the volatility the new Trump administration had shown, with some of the president's executive orders being challenged in the courts, it was important not to react too quickly to policy changes.
"We have to make sure we play a long game to protect our interests," he said.
"It is not clear where they are going to land with some of their policies. The legal challenges on immigration reinforce that change is happening very quickly. In times like that, it doesn't make sense to draw huge lines in the sand - we just have to adjust to what is in front of us."
Regional trade proposals:
* Trans-Pacific Partnership includes: Brunei, Chile, New Zealand, Singapore, Australia, Canada, Japan, Malaysia, Mexico, Peru, Vietnam, and the US (which has now withdrawn).
* Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement between the 10 member states of the Association of Southeast Asian Nations, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, and the six states with which ASEAN has existing free trade agreements, Australia, China, India, Japan, South Korea and New Zealand.
