Jane Kelsey: TPP deal keeps disappearing down rabbit hole

NZ Trade Minister Tim Groser. Photo / SNPA

Alice in Wonderland said: "If I had a world of my own, everything would be nonsense. Nothing would be what it is, and everything would be what it isn't." She could well have been describing the current state of the Trans-Pacific Partnership (TPP) agreement.

Trade ministers from the 12 participating countries met in Sydney over the weekend. Their official statement repeated the upbeat rhetoric of the past three years: "The shape of an ambitious, comprehensive, high standard and balanced deal is crystallising" and the ministers are now "passing the baton" to their chief negotiators to carry out their instructions. New Zealand Trade Minister Tim Groser talked of "significant progress" taking them "within sight of a finish line".

That finish line keeps disappearing into the distance.

In June when US President Barack Obama met Prime Minister John Key, Obama foreshadowed a grand announcement when the TPP leaders were due to meet on the margins of Apec on November 10-11. Their meeting is now expected to be low key.

There could be a diplomatic justification for that. China is hosting this year's Apec meeting and the TPP has been touted in the US as a counterfoil to China's rising power in the Asia Pacific region, often using inflammatory language. But if that was the reason, the leaders could meet in a nearby country en route to the East Asia summit in Burma or before the G20 summit in Brisbane a few days later. Apparently they are not.

The more credible reason is they have nothing to announce. Yet another missed deadline is an embarrassment, especially for Obama. Hence, the low profile.

The talks have been going for 4 years. The novelty and risks of the TPP rest in the majority of chapters that are not about old-fashioned trade. So it is ironic that everything hinges on a deal on agriculture and automobiles between the elephants in the room, the US and Japan. Despite intense negotiations for more than a year, they remain poles apart.

The agreement will soon face a problem of momentum as well as credibility. The technical work on the 29 chapters is almost done. Disagreements in the most controversial areas - the impact of intellectual property on medicines and the internet, state-owned enterprises, foreign investors' rights to sue, financial regulation and capital controls, labour and environment - have been narrowed to the point that they require political decisions. Most chapters will need only two or three more meetings.

Once that technical work is done, the plurilateral TPP process could go into hibernation until the US and Japan agree, if they ever do.

That is a big worry for Groser. In a bizarre twist on the notorious secrecy of these talks, neither he nor the other nine countries actually knows the details of what Japan and the US are discussing. That remains confidential to them, even though the entire agreement hinges on it.

Groser is clearly concerned that the US and Japan will reach a deal and present it as a fait accompli, just as the US and European Union did in the late stages of the Uruguay round of the Gatt in 1992.

The rest will have to live with it and accept whatever they are offered or be blamed for collapsing the deal.

That is consistent with Japan's current approach. Its recent offer to New Zealand on agriculture reportedly falls far below what the Government and farming sector consider acceptable.

Last Sunday on TV3's The Nation Groser put the chance of there not being a deal acceptable to New Zealand at 25 per cent. Fonterra chief executive Theo Spierings expressed doubts that the TPP would ever be concluded.

I can't see this minister walking away from a mega-deal that he sees as his brainchild. New Zealanders will be told the TPP is too important for us not to be a part, and that any costs are just a fact of life. Alice would feel perfectly at home.

Jane Kelsey is a law professor at the University of Auckland.