Fran O’Sullivan: CPTPP meeting a fitting swansong for Damien O’Connor

Caretaker Trade Minister Damien O’Connor will go to Apec.

Opinion

OPINION

Damien O’Connor left Auckland last night for San Francisco and has a full dance card, presiding over the meeting of 12 ministers from nations who are signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

He will also be taking part in another 14-strong ministerial meeting which will sign off on a joint approach to regional supply chains as part of the US-led Indo-Pacific Economic Framework for Prosperity (Ipef), and work to advance New Zealand’s interests at the two-day meeting of foreign and trade ministers from the 21 nations that comprise the Asia-Pacific Economic Co-operation (Apec).

National has been briefed by New Zealand’s trade negotiators and will be fully across the expected announcement. But it has (so far) not slated a prospective minister to go up to San Francisco in an observational capacity.

It feels like a week of acronyms – and it is. Somewhat mind-boggling, in fact. But international politicking – think jostling between China and the United States, the quagmire of the Russia-Ukraine war, and now Israel - will all be part of the political undercurrents.

The FBI has issued security warnings as anti-Israel protests sweep the United States.

That is not part of O’Connor’s brief. Those issues will sit with Chris Luxon, assuming he can get sworn in as Prime Minister in time to make the two-day Leaders’ Meeting later in the week. But they will be in the background.

Put aside, also, the confusing trade nomenclature.

It is fitting O’Connor is the New Zealand politician who will preside over the mid-week breakfast meeting of CPTPP ministers who will endorse the review. He has been in the box seat during New Zealand’s year as chairman of the CPTPP Commission, and our trade officials have played a strong leadership role in forging consensus on what comes next.

The international commercial environment is fast-changing. The Covid pandemic spurred a rapid uptake in digital commerce, and the reality is, the CPTPP agreement has been superseded by developments in the global digital trade architecture.

It won’t all be plain sailing.

China is champing to join the CPTPP, with Chinese President Xi Jinping lobbying both caretaker Prime Minister Chris Hipkins in Beijing in June and Australia’s Anthony Albanese just last week. There is strong opposition from Japan and the UK, which joined the CPTPP in July.

A Japanese official told the Australian Financial Review CPTPP is a strategically important framework that contributes to the establishment of a free and fair economic order, and it is important to maintain the spirit and principle that economic coercion and unfair trade practices will not be tolerated.

China submitted its own formal request to New Zealand, which is a repository for the agreement, to commence negotiations on acceding to the CPTPP on September 16, 2021.

China does face difficulties in getting the 12 CPTPP partners to support its accession bid. The upgrade is expected to also include the role of SOEs and data sovereignty – two areas where China is vulnerable if CPTPP standards are raised.

For its part, China – including via ambassador Wang Xiaolong – argues potential accession will be a spur to China’s own domestic economic reform programme.

The agreement was forged off the bones of the original TPP, or, Trans-Pacific Partnership agreement, which Labour was against while in Opposition. It was later tweaked at a meeting adjoining the 2017 Apec Leaders’ meeting which Dame Jacinda Ardern attended as Prime Minister and sealed in January 2018 to accommodate political considerations by New Zealand and others.

There will also be an “early harvest” from members of Ipef, which is expected to cover the clean economy and the fair economy pillars and supply chain pact.

Speaking to the Herald before his departure, O’Connor was loath to colour this Apec trip as his “swansong”. But it’s obvious Labour’s outgoing Minister for Trade and Export Growth will not hold this particular portfolio again in the medium term.

If the CPTPP review is signed off, he will, however, have another feather to add to his cap - on top of trade deals with the EU and UK and the upgrade of the free trade deal with China.

Fran O’Sullivan will be commenting from the Apec business meetings.