Editorial: Challenge now to make TPP 'gold standard'

Prime Minister John Key. Photo / Getty Images

Opinion

Reflecting on his visit to United States, John Key described himself as "the lucky Prime Minister". It had been his good fortune, he said, to visit Washington at a time when the difficulties of the past couple of decades had been surmounted and the relationship between New Zealand and the US had come of age. That favourable timing had been evident in the tenor of his talks and the seniority of the officials who met him. Much the same alignment of stars might yet also be apparent over US membership of the Trans Pacific Partnership trade agreement.

Creating momentum in that negotiating process was the Prime Minister's major objective in Washington. This appears to have been achieved. Mr Key said after meeting President Barack Obama that he was increasingly confident the US would join the proposed nine-nation pact. Indeed, the President seems to have taken little cajoling. With the American economy in the doldrums, and the major threat to his re-election, he has been heavily promoting free trade as the way to deliver jobs and sharply increase US exports.

This is far from the norm for a Democrat President. Instinctively, they tend to have a protectionist bent, a trait that becomes more pronounced during troubled economic times. President Obama, however, has taken a different tack. Free trade fits his agenda of steering a new course away from the Bush Administration's unilateralist mindset. He seems also to appreciate that even American dairy farmers could gain from the trading opportunities provided by the Trans Pacific Partnership, with the benefits for them outweighing problems raised by the removal of barriers to the New Zealand industry.

Mr Key said both the US Treasury Secretary, Timothy Geithner, and the President had predicted powerful growth in Asia over the next 10 to 20 years, and believed they had to be engaged there. In effect, the danger of being absent was as potent as the economic opportunity, and the rise of China made connection imperative. New Zealand's experience in securing trade agreements in the region clearly makes it useful for achieving American ambitions there.

It would, however, be unwise to be starry-eyed about the opportunities that appear to be opening up. The US expressed an interest in the Trans Pacific Partnership as far back as 2008. At that point, it would surely have been expected that a deal would be completed by now. President Obama's hosting of a gathering of the Asia Pacific Economic Co-operation (Apec) in Honolulu in November would have seemed the ideal opportunity for the nine leaders to put pen to paper. As it is, the President hopes to have nothing more than a framework agreement in place by the time of that meeting.

That is a measure of how little practical progress has been made and how far there is to go. Nitty gritty issues of much interest to New Zealand, not least the status of drug-buying agency Pharmac, have yet to be traversed, and politicians have yet to make decisions. Pressure is certain to be applied over Pharmac even though Mr Key went out of his way to note that its role had not been specifically mentioned in his talks.

Broadly, however, the issue now seems to be not whether a comprehensive Trans Pacific Partnership including the US can be done, but what shape it will take. That, in itself, is progress. Serious challenges are inevitable in bargaining between nine nations, each with its own aims and motives. New Zealand's aim will be to achieve what the Trade Minister, Tim Groser, has described as a "gold-standard" agreement. For that to occur, the Americans will have to demonstrate that their commitment is, indeed, genuine.