Editorial: TPP without dairy access will be hollow

Trade Minister Tim Groser's tone has changed somewhat with regards to the TPP. Photo / AP

A gold-standard free trade agreement, so long the Government's goal for the Trans-Pacific Partnership, is not going to eventuate. This was implicit in the Prime Minister's statement that the Government would face a higher medicines bill because of the pact's provision for extended patent protection. That being so, New Zealand has the task of securing worthwhile compensation at the ministerial talks now in progress in Hawaii. Inevitably, the focus is on our dairy products gaining worthwhile access to the huge Japanese and American markets.

The signs at the start of this week were not auspicious. Trade Minister Tim Groser said New Zealand was looking for "commercially meaningful access". There was, he added, nothing on the table "that allows me to recommend to the Cabinet that we should sign the deal at this point". A few days later, the situation had become alarming enough for John Key to seek to rally support by making personal calls to the leaders of some other TPP countries.

New Zealand is having to deal with two nations that have long resisted opening their dairy industries to competition. The Americans and the Japanese fear the impact of New Zealand's large-scale and efficient production. The danger is that they will try to fob it off with access that is limited and won't take effect for a long time.

New Zealand's negotiations have been further complicated by the head of steam engendered by President Barack Obama's securing of fast-track approval for the TPP from Congress. The negotiations in Hawaii are widely viewed as being the final stage before the signing of the 12-nation pact.

This has emboldened Japan to suggest matters should not be put at risk by laggards. It has said that if countries are not prepared to reach an agreement during the current talks, they should be cut adrift, with an option to join the TPP later.

That is more than a little rich coming from a country with Japan's protectionist instinct and history. It also hints at a discouraging unwillingness to compromise. Nonetheless, its view and Mr Obama's wish for the agreement to be passed by Congress before next year's presidential election put pressure on the negotiations. The Government is highly unlikely to walk away with only the notion that New Zealand might be able to join at some future date. It will want to get in on the ground floor, a view alluded to by the Prime Minister when he noted the pact would encompass 40 per cent of the world's economy.

For a long time, Mr Key and Mr Groser emphasised that high-quality and comprehensive dairy access must be part of the TPP. Now, the tone has changed somewhat. The Prime Minister is stressing the increased prosperity and wealth creation opportunities that will flow from being part of it. It would now be extremely difficult for New Zealand to walk away from a pact that it played such a large role in creating and which now involves so many Pacific Rim nations. But if the gains for dairy exports turn out to be extremely limited, the TPP will have a hollow ring.

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