Outside of bilateral free trade agreements, there has been precious little in the way of concerted plurilateral or multilateral liberalisation of trade and investment over the past 20 years. This matters for New Zealand because the largest economic gains " especially for our primary sector " have come from multilateral liberalisation, including the major boost provided by the 1994 WTO Uruguay Round. And it is widely accepted and empirically proven that the larger the club of economies liberalising, the larger the economic benefits: there is strength in numbers.
It's no accident that world poverty reduction - including extreme poverty as documented by the World Bank - has been driven by countries which have engaged more and more with the rest of the world. Autarchy has not helped people's living standards.
Yet, because it is a consensus decision body, the World Trade Organisation (WTO) remains largely moribund in terms of opening up new market opportunities and removing distortions from the global trading system. Of course, New Zealand continues to benefit from the WTO's role in making global trade rules and enforcing them, such as through disputes settlement. But despite positive progress at the 2013 Bali meeting and hope for further movements around agricultural competition and development issues ahead of the December meeting in Nairobi, there seems little obvious desire from key dissenting parties to negotiate another round of binding market access commitments.
Given the WTO's struggles, the conclusion of TPP provides a hugely positive effect.
It shows that a set of highly diverse set of economies at varying stages of economic development can nut out their considerable differences and deliver outcomes that cover trade liberalisation in all goods and services.
The TPP's second lasting contribution is to show that with a bit of polishing and adaption the methods that have been used since the early days of modern mass mutual trade liberalisation still can be effective. They can even accommodate the "new" trade issues that matter enormously to global integration with its spin offs for consumers. We know that enhancing the quantity, quality and diversity of goods and services available for consumers depends on easing the restrictions on businesses such as clamps on inward and outward investment, limits on people flows, restrictive rules of origin, behind-the-border and non-trade barriers and overly restrictive government procurement, competition policy and intellectual property rules.
The game now is much more about progressively removing grit from the engine of regional production networks and reducing costs along supply chains.
The debate between the pro- trade and anti-trade factions has at time been unseemly, and the rhetoric has rarely matched reality. But there is no doubt that those concerned about the long shadow of TPP on domestic policy settings, both in New Zealand and overseas, have raised valid and important issues that demand greater research and wider exposure.
The direct benefits to us from the TPP stem from the boost it will give Kiwi firms in terms of medium- to long-term competitiveness and enhanced participation in regional production networks in the Asia-Pacific. But more widely, New Zealand firms and consumers will benefit from the impetus this deal gives to trade liberalisation on a global level in restarting international integration as a driver of prosperity. An enormously complicated deal was pulled and pushed into being. It shows what can be done to promote regional and global economic integration if the political will is strong enough. That is likely to be TPP's enduring legacy.
-John Ballingall is deputy chief executive of the New Zealand Institute of Economic Research and this is an edited version of a column that ran in the New Zealand Herald.
-Views expressed here are the writer's opinion and not the newspaper's. Email: editor@hbtoday.co.nz
