No TPP deal, but Groser 'extremely confident'

Minister of Trade Tim Groser. Photo / Getty

Intensive negotiations to seal the Trans-Pacific Partnership trade and investment pact in Hawaii this week have failed.

The contentious free trade deal, which US president Barack Obama has made a legacy issue as his eight year presidency draws to a close next year, is not dead, with ministers vowing to continue negotiations, but no new date has been set for all countries to meet again, with the timetable sensitive to being derailed by next year's US presidential election.

Key sticking points were among those most important to New Zealand: improved access for dairy products into the US, Japan and Canada and US pharmaceutical firms' demands for longer patent terms for new drug treatments.

At a press conference in Hawaii, US Trade Representative Michael Froman said the week of negotiations involving officials and trade ministers from the 12 nations involved in the TPP initiative had made "significant progress and will continue to work on resolving the limited number of remaining issues", paving the way for an agreement to be reached.

New Zealand Trade Minister Tim Groser, speaking at the same media call, said he was "extremely confident we will find that sweet spot" where countries resisting opening their markets to competitive dairy trade would be won over.

In more than 30 years of negotiating trade deals, "dairy is always the last or one of the last few issues to be resolved because it has been so distorted for so long," he said.

Without improved dairy access, the New Zealand government will face deep criticism at home, while even a small increase in the current five year life for drug patents would increase costs for the government's drug-buying agency, Pharmac, which controls the purchase of pharmaceuticals subsidised by the public health system.

Pharmac achieves major savings for taxpayers by waiting for new treatments to fall out of their patent periods and be manufactured more cheaply as generics by competing drug makers.

Pharmaceutical patents tend to run five years, but pharmaceutical firms - many of them US-headquartered - have been pushing for an extension to 12 years, with negotiations understood to have centred on pulling that back to perhaps seven years.

Asked whether New Zealand had ever considered abandoning the TPP talks because of the difficulty of getting a reasonable deal on dairy products, Groser said he was "not emotionally in the space of wanting to leave the party", given that New Zealand had initiated the TPP in the first place.

"We will not be pushed out of this agreement," he said.