Trump's TPP withdrawal leaves open door for China, says trade envoy

Special trade envoy Mike Petersen says there is enough momentum and interest to keep a large part of the TPP agreement intact.

China may take the place of the US in an Asia-Pacific free trade agreement following the US withdrawal from TPP, says special trade envoy and Waipukurau farmer Mike Petersen.

"I get a sense there is enough momentum and interest to keep a large part of the TPP agreement intact and to see if we can build on that with another forum or partner, which may be China and it may also be Korea, " he said.

Speaking from Germany, the former chairman of Beef + Lamb said US president-elect Donald Trump's promise to withdraw the US from the trade deal in January was disappointing "but this doesn't necessarily mean the end of TPP".

"Just because the US has withdrawn doesn't mean we will stop. TPP is a series of bilateral agreements between each of the 12 members. Because the US pulls out it means our bilateral agreement with the US will lapse, but it doesn't mean that the others need to."

He said the 12 TPP nations agreed it would only advance if nations representing 85 per cent of combined GDP ratified the deal.

"That required the US and Japan to agree, however there is nothing stopping the other 11 members now talking about what they might do without the US."

He said government ministers started conversations to that end in Peru last week at the Asia-Pacific Economic Cooperation (Apec) meeting.

Apec, which has 21 members including China, is the primary forum for economic growth and co-operation in the Asia-Pacific Region.

"You would have seen some reports coming out on how China is very keen to see how they could be involved in a deal around the Asia-Pacific.

"This is the beast we always talked about - if the US withdraws then they will hand influence in the Asia-Pacific to China."

He said China had long promoted the Asia-Pacific Trade Agreement, which it actively promoted in Peru.

"They have been promoting that for some time now and when TPP was progressing all of us in the Asia-Pacific wanted to do that option first.

"Something will come out of the Asia-Pacific region which New Zealand will be a part of. It just won't include the US for now and China will likely be at the centre of it."