Reactions, generally, have been positive to agreement on the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
And so they should be.
Although the world’s powerhouse in the United States is absent, better access to Japan, the world’s third-largest economy, is the major prize for New Zealand. Red meat exports there had lost market share because Australia and the European Union have better trade deals.
Lower tariffs for the likes of Mexico, Canada and Peru will also help.
The Greens still oppose the deal, as do some in the Maori world. But New Zealand First has been pragmatic. Changes from the original Trans Pacific Partnership proposals have combined with the responsibilities of being in government to change Winston Peters’ mind.
He knew Labour could pass the necessary CPTPP legislation with the support of National. It was to his and Labour’s advantage to present a unified front, especially on such a significant matter this early in the new Government’s tenure.
Labour, too, is pointing to the changes. Meanwhile, the delays mean it has time to change foreign property buying rules before the agreement is ratified.
Leader Jacinda Ardern and Trade Minister David Parker can crow about the revisions, which National said were not possible. Pharmac’s position is secure, extensions of copyright and patents do not come into force and the investor-state dispute provisions are gutted.
The changes were possible because most of these matters were at the insistence of the United States and in the interests of its corporations. For the US, the agreement was about investment rights and opportunities and intellectual property, not just trade. Its absence allowed several countries room to move, including Vietnam. Previous clauses on labour standards no longer apply.
All these changes, technically suspensions, make the CPTPP more a trade deal. That is despite the word "comprehensive" in its title. One might also argue the weakening of labour and environmental standards hardly make it "progressive".
Never mind, the changes help countries like New Zealand preserve a little sovereignty in a global world.
Better access to the United States markets would have been the big break. Given the protectionist attitudes of President Donald Trump, as well as prevailing scepticism from the US "left" about open trade, there is little prospect for it to rejoin negotiations soon. Nevertheless, the remaining 11 nations still account for 13% of the world’s trade, and there are options for other nations to join.
The likes of Indonesia would give more scale to the group.
It is also important because of the massive size and power of China. The countries of Southeast Asia bolster each other’s strength through a separate trading agreement and through links across the Pacific. Given the United States’ erratic and slipping influence in the western Pacific, wariness of China is prudent, despite mostly good relations at present.
Labour’s attitude would have been intriguing had the original TPP still been on the table. Given the breadth and depth of vehement opposition and the perceived threats to this country’s sovereignty, the outcome could well have been different.
More details will emerge before and after the March 8 deal signing in Chile on the extent and speed of tariff reductions, as well as on other matters. New Zealand will not have got everything it wanted.
That is the give-and-take nature of such deals. Fundamentally, New Zealand is a tiny nation heavily reliant on trade and globalisation, even if that has become a dirty word in some circles. Something has to pay for all the imports, the mobile phones, televisions, medical supplies, overseas holidays, cars.
The reduction of tariffs, as promised, makes the agreement worthy of support as this country tries to pay its way in the world.
