Toughest issues on TPP agenda

Tim Groser.
Tim Groser.
World trade ministers will be in Hawaii this week to tackle the tough decisions needed to finalise a deal aimed at freeing up global commerce.

For New Zealand, the future of Pharmac and dairy tariffs are key issues Trade Minister Tim Groser and his team will be discussing.

This week has been called the end-game of the Trans-Pacific Partnership, with the toughest issues requiring political agreement and painful compromises having been left to the end.

Mr Groser said dairy was unquestionably the most important issue for New Zealand as it made up 25% of the country's 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 other areas, and the deal for dairy simply isn't there yet,'' he told TV3's The Nation.

Dairy was the most important focus he had over the next seven or eight days, Mr Groser said.

''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 we should sign this deal at this point. That's for the next few days. It's going to be hard yakka.''

The United States, New Zealand and Australia are pushing hard for Canada to open up its protected dairy market and allow more imports, complaining that the country has not given its trade partners a sign it is ready to talk and is even mulling a TPP without Canada.

With a national election set for October, Canada's Conservative Government was wary of angering farmers by altering the supply management system which keeps dairy and poultry prices artificially high by restricting supply, Reuters reported.

Canada's dairy industry says it supports 215,000 jobs and contributes $NZ22 billion to the country's economy.

The US also wants TPP countries to agree to protect data used to develop next-generation biological drugs for 12 years, which would be a boon for companies such as Pfizer and Japan's Takeda Pharmaceutical.

Although such a move would push up the cost of medicines for New Zealand and Australia, the pharmaceutical industry argued it would accelerate the introduction of cheaper, generic drugs by giving developers more certainty.

The US said it would balance the needs of developing countries to access affordable medicines.

Mr Groser guaranteed New Zealanders the trade deal would not make drugs more expensive for them over the counter.

''I can guarantee that we've made it absolutely clear we are not going to dismantle the fundamentals of Pharmac. The provisions that guarantee affordable medicines - we don't want to change the system of health we've got in our country so that people can get medicines only if they can afford it.

''We've got a good system and we're not going to let any trade agreement interfere with that.''

A draft text released by Wikileaks in March showed countries were seeking exemptions from proposed investment protection rules which would allow companies to sue foreign governments.

Australia, whose plain cigarette packaging law was being drafted by Marlboro maker Philip Morris' Asian arm, was ready to opt out completely. The US floated an exception to the rules for tobacco, sources briefed on the talks said.

More broadly, TPP countries have not yet determined how to address tobacco-related public health issues in the agreement. Malaysia and anti-smoking groups want to completely exclude tobacco from the deal and keep tariffs on US tobacco products.

Mr Groser said a deal was being considered that included well-drafted ISDS - investor-state dispute settlement - which was along the model of the dispute settlement divisions included by the previous Labour government in trade deals with China and other countries.

They had been found to have caused no problems for New Zealand.

Experts were advising the trade delegation and Mr Groser said he felt certain they would provide policy space for future New Zealand governments to regulate in the public interest.

''The reason we're there is because we also have got concerns about our own investments overseas should they be subject to the processes we think are really dodgy. So it's a two-way street and I'm pretty comfortable where we are.''

Asked what guarantee he could give corporations would not be able to successfully sue the Government for regulating in the public interest, Mr Grosser said no-one could ever guarantee what some errant judge would say.

''What I can guarantee is that we will deliver an agreement that gives the future Crown, under circumstances like that, the best possible way of defending New Zealand government.''

Add a Comment