Todd McClay is disappointed about Donald Trump's announcement he will not support the TPP. Photo/File
US president-elect Donald Trump's announcement that the US will quit the Trans-Pacific Partnership (TPP) trade deal on his first day in office has been met with disappointment at lost opportunities. But it has come as no surprise to Bay of Plenty business leaders and politicians.
"Mr Trump's views and intentions on the TPP have been known for some time," said Tauranga Chamber of Commerce chief executive Stan Gregec.
"But New Zealand and other trading countries like us will have a credible Plan B in place. There is no doubt that free trade agreements [FTAs] and the breaking down of global trade barriers are what works for us, so there will be other options to pursue."
Trade Minister Todd McClay, the MP for Rotorua, said the announcement was no surprise.
"But I'm starting to hear a lot of disappointment from a number of people in the export sector in the Bay - particularly the forestry sector, because TPP will bring tariffs down to zero - and from horticulture, kiwifruit and many, many others."
However, New Zealand's position remained the same, New Zealand having just passed its own TPP-enabling legislation. He added that the sentiment at the recent Asia-Pacific Economic Cooperation meeting had been strongly supportive of continuing with the TPP process.
And there was no question of the US not continuing to trade with New Zealand, he said, adding that one of New Zealand's key drivers for TPP had been to get an FTA with the US. "We still just need to keep it moving forward and let it settle a bit. There are benefits to TPP that we will keep explaining."
Export NZ executive director Catherine Beard, responding on behalf of ExportNZ Bay of Plenty, noted that the queue for a bilateral agreement was likely to consist of bigger economies that have more priority for the US.
The failure of the US to engage with TPP would be a disappointment mainly for agri-exporters as they tended to face the highest tariffs, she said. "Really the impact is on opportunities going forward."
Certainly the new US administration is going to need to work out next year exactly what role it wants to play as far as leadership in Asia Pacific is concerned.
Bay of Plenty MP Todd Muller said that while nothing much would change for now, Mr Trump's announcement was significant longer term.
"We had negotiated a reduction in tariffs across a very large trading bloc," he said. "For that not to proceed is potentially a lost opportunity. It's dangerously close to the protectionist rhetoric I thought we had long gone past. And from New Zealand's point of view that's unfortunate."
Rotorua Chamber of Commerce president John McRae said many governments had worked very hard to get the TPP in place.
"We don't have the agreement in place now, so there won't be a negative effect as such. But for our local economy it's disappointing we're not going to be able to look forward to the positive impact of what the TPP could have brought for us, particularly for the forestry industry and big players like that."
Mr McClay noted that US failure to support TPP risked China assuming a wider role in Asia Pacific trade policy. New Zealand has just announced an upgraded FTA with China.
"The very reason [the US originally] wanted to be involved in TPP was to have a big voice in the Asia Pacific. If they're choosing not to, there are many other countries that will decide to, and China is likely to be one of them. Certainly the new US administration is going to need to work out next year exactly what role it wants to play as far as leadership in Asia Pacific is concerned. It's still unclear to me what that is likely to be."
Trans-Pacific Partnership
Includes: Brunei, Chile, New Zealand, Singapore, Australia, Canada, Japan, Malaysia, Mexico, Peru, Vietnam and the US.
All 12 parties signed the negotiated agreement in February 2016, but President-elect Donald Trump has announced the US will not take part.
The TPP is currently awaiting ratification by each country to enter into force.