TPP negotiations set to accelerate after Obama gains fast track powers, Groser says

Tuesday 30th June 2015

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser.

With US legislators granting President Barack Obama's administration fast track approval, Groser expects the 12 nations' negotiators will put their real cards on the table after several years of shadow-boxing. The US Senate and House of Representatives this month affirmed Trade Promotion Authority, or fast track authority, meaning the president can take a trade deal to Congress for a so-called 'up or down' vote, which can only accept or reject the deal, not alter it. Unless US policymakers approved TPA, Japan and Canada wouldn't back a final deal.

"Now that Congress has spoken, it is show time," Groser said in a speech to the US/NZ Partnership Forum in Auckland. "I have learned never to be dogmatic about timetables, but the scenario that I and my negotiators are working to is that we have to get the basic political deal done by the end of July, including finalising all the chapter texts, leaving only legal rectification by experts to be done thereafter."

Groser said a successfully completed deal won't be perfect, but that he and his officials have told Prime Minister John Key and other ministers that "there is potentially a landing zone for a good deal that will indeed shape the future of trade and investment integration in the Asia-Pacific region, and quite decisively."

The lack of clarity over dairy, New Zealand's biggest export commodity, "will change because it has to change," Groser said. If dairy was excluded from the TPP, New Zealand would walk away, he said.

The TPP agreement seeks a trade agreement spanning the Pacific Rim and currently involves 12 countries: New Zealand, Australia, the United States, Canada, Japan, Singapore, Malaysia, Brunei, Vietnam, Chile, Peru, and Mexico.

Where the deal differs from other free-trade agreements is that it includes alignment of regulatory settings across borders rather than simply removing quotas and tariffs. It has faced staunch opposition from those who claim it undermines national sovereignty through investor-state dispute settlement (ISDS) provisions and through its treatment of intellectual property and medical procurement.

Groser again defended New Zealand's negotiating position, saying he wouldn't "sign up to poorly constructed ISDS provisions that 'transfer control of the country's sovereignty' to foreign corporations" or "undermine a central pillar of our public health system - the pharmaceutical agency called Pharmac" or prevent future governments from implementing well designed environmental protections.

"If and when we get TPP in place, extreme claims that the sky is going to fall in will be made, irrespective of a balanced and sober reading of the final agreed TPP texts," he said.

Groser also scotched speculation that the agreement was part of the US's plan to contain the emerging Chinese superpower, and said China could potentially sign up to a later iteration of the TPP.

BusinessDesk.co.nz

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