Agricultural trade envoy convinced 'something will come out of TPP'

New Zealand's special agricultural trade envoy, Mike Petersen, remains convinced that something will come out of the Trans Pacific Partnership trade and investment agreement.

Speaking at the launch of New Zealand Horticulture's Barriers to our Export Trade 2016 report in Wellington, Mr Petersen said: "The withdrawal of America actually offers the opportunity for that framework and some of the principles in that agreement to be transported into another agreement around the Asia-Pacific (region). I have every confidence that that will happen."

US President-elect Donald Trump has indicated he will withdraw from the TPP free trade agreement during his first day in office.

Twelve countries, including Canada, Mexico, Australia, Malaysia, Singapore, Brunei, Vietnam, Peru and Chile signed the agreement, which would reduce tariffs to try to boost trade in the region. The TPP excludes China and was widely seen as a key part of outgoing US President Barack Obama's 'pivot to Asia' to counterbalance China's growing power in the region.

Also in the mix is the Regional Comprehensive Economic Partnership (RCEP), a so-called 'low ambition' trade pact currently under negotiation that involves China, India and Korea – none of which are in TPP – and includes Australia and New Zealand and the Asean member countries but excludes the US. New Zealand already has bilateral FTAs with China and Korea but is struggling for progress with India.

Mr Petersen told his Wellington audience that the world had become a complex place.

"The complications of Brexit, the inward-looking, nationalist type policies of some of the European countries. If we look at the US, we don't know what President-elect Trump will do. But certainly, if his rhetoric was anything to go by, then we do have some issues to deal with over the next few years."

In a speech to the Institute of International Affairs yesterday, Foreign Minister Murray McCully said one of New Zealand's biggest issues was how the Trump presidency would "change the balances that impact on the stability and security of the Asia-Pacific region."

"President-elect Trump has said that the US will not be part of TPP. But we also know that an Asia-Pacific pivot without the trade and economic substance is no pivot at all. Whether there is trade and economic substance is something we will see in due course."

In the meantime, New Zealand needed to "remain focused" on its relationship with China if the "current excellent trajectory" in what was a "very big, complex, asymmetric relationship" was to reach its potential.

(BusinessDesk)