TPP's soft cop has hard deals to make

Wendy Cutler. Photo / AP

Issues critical to NZ’s wellbeing are yet to be addressed — top of the agenda is market access for dairy.

Trade Minister Tim Groser and Deputy US Trade Representative Wendy Cutler got into Hawaii early last weekend to set the scene for a high-powered ministerial meeting to thrash out the bones of the final Trans-Pacific Partnership (TPP) deal.

New Zealand has skin in the game when it comes to TPP. Not only is this country the repository or administrator for the TPP negotiations, but its key trade diplomats from Groser down are intimately involved as deal-fixers alongside the United States.

They play the soft cop to the USTR's hard power megaphone as the major shapers of TPP who are endeavouring to keep the momentum moving so a deal can be inked at the November Apec Leaders meeting.

It is inconceivable that Groser and Cutler would not have caught up while their respective negotiating teams prepare to wrangle over the dense pages of text that underpin the draft deal.

But playing the soft cop cannot be allowed to blind Groser and his senior negotiators to New Zealand's own interests.

Already the Labour Party has given conditional support only to the deal. It not only wants to see the fine print but has signalled five no-go areas.

At the negotiating level, broad support has been stitched up in several areas, notably constraining state-owned enterprises from using soft loans to compete against private companies.

But contentious issues critical to New Zealand's wellbeing are yet to be addressed. Top of the agenda is market access for dairy.

Both Groser and John Key earlier signalled that it would be a deal-breaker for NZ if there was not a high-quality comprehensive result on this score. The position has since become more nuanced.

On TV3's The Nation Groser said it was important as it was 25 per cent of export earnings. "It'll be a bit light this year because of fallen dairy prices, but it's typically around that. We've got very good deals shaping up in the other areas, and the deal on dairy simply isn't there yet.

"So this is the most important focus for me in the next seven or eight days. We are looking for what we call commercially meaningful access. I'm not going to be dogmatic about how to define that, but there's nothing on the table yet that allows me to recommend to the cabinet that we should sign this deal at this point."

The US is pushing aggressively to strengthen IP protections for technology, entertainment and pharmaceutical companies.

The Ministry of Foreign Affairs and Trade has outlined that there will be a strong expert team including advisers on IP and dairy on hand for the negotiations.

The NZ delegation includes lead TPP negotiator David Walker, who is a deputy secretary at the Ministry of Foreign Affairs and Trade, and deputy chief negotiator Brad Burgess.

Last week US Department of Commerce official Tami Overby identified intellectual property (IP) as the most difficult area.

There is a political imperative to the negotiations.

President Barack Obama wants to get a deal in place to go before Congress prior to the presidential election.

For NZ the emphasis is not just political but economic. As Mr Key said yesterday: "At the end of the day, TPP is going to create wealth for this country. This is 40 per cent of global GDP. We've got to be part of this agreement, provided we can get a deal that makes net sense to New Zealand."

Time will tell whether NZ succeeds in this mission.

New Zealand's prime negotiating lines

• Put dairy at the top of the market access agenda

• Embrace refined Investor State Dispute Settlement arbitration procedures

• Protect Pharmac

• Ensure medicines will not be more expensive in the hands of consumers but patent law changes involving biologics may result in increased Government funding

• Join the US and Australia to endorse rules to prevent SOEs exercising an unfair advantage in TPP markets.