Jacobi on TPP

 writes in the NZ Herald:

As the debate continues, here’s a brief guide about what to look for.

Dairy has the most potentially to gain. It’s our largest export and the barriers in the US, Japan and Canada are absurdly high.

The question is not whether dairy will be excluded from the deal, but rather the extent of its inclusion – will economies allow significant access into the dairy consumption in their markets and under transparent rules? Will these benefits be offered to all or will there be better access for some?

Again, I’m very pleased the NZ negotiators refused to accept a deal that didn’t deliver enough on dairy.

The sad thing with the soviet-style system of quotas the Canadian industry has, is that it stifles them, rather than protects them. The history from NZ is that removing protection will actually massively boost the local industry, as they have to then respond to competition.

If Canada did have the political will to reform their system, they would find over time I am sure that the biggest beneficiaries would be Canadian diary farmers. Just as the NZ wine industry grew massively once they lost their tariffs and protection.

Other goods should not be overlooked. In just four major exports – meat, horticulture, seafood and wine – there are annual tariffs paid of at least $130 million.

If other products are added (forestry, manufactured goods), and with some even partial gains on dairy, the benefits from elimination would be significant. This is not new business, which could occur under lower tariffs, or overall economic impact, just money saved.

If a deal is struck, it will be good to see an economic analysis of the impact.

On intellectual property New Zealand has interests to promote – our creative industries and some IT exports could benefit from better IP protection internationally – as well as some clearly identified risks to avoid.

Generally the Government will want to hold, to the greatest extent possible, to existing policy in respect to medicine pricing, the role of Pharmac, patent terms and extensions including in respect to biologic drugs and to software, copyright, geographical indications, parallel importing and internet file downloading.

Very pleased to see Stephen agree we want to retain current policy on copyright, parallel importing, downloading, patents etc. From all accounts the negotiators have done that.

This is not to suggest that some changes to existing policy might not need to be made.

Hopefully nothing too major. I understand the term of copyright may increase, which is regrettable, but not as bad as many other possible changes.

Reports coming out suggest that the US has backed down on most of the IP chapter demands – to the degree that Australia wants the TPP agreement to supersede their bilateral FTA agreement on Internet copyright issues, as it is less onerous.

The US press has pointed to the value of the first FTA to include binding environmental provisions which protect endangered species.

New Zealand has always championed the elimination of fish subsidies.


Some will argue that what is now realistically on offer is significantly less than the bold vision for TPP outlined at Apec in Honolulu in 2011. They are right. That is deeply disappointing for negotiators and business alike.

“High quality, ambitious and comprehensive” was how TPP was begun and should guide its ending.

What the process has showed is that there are protectionist and anti-competitive forces at work even in the most open of trading economies.

Yep, it is not going to what they wanted at the start. Part of this is because Japan and Canada were allowed in. That is good in terms of more markets being available to us, but bad in the sense of getting a higher quality agreement.

Whether or not the TPP is a net plus for New Zealand will be seen when or if there is a final agreement. But again I find it encouraging that NZ was prepared to reject an agreement which didn’t deliver enough for dairy, and just as importantly is holding our position on the IP chapter.

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