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The Trans-Pacific Partnership (TPP) aims to create a regional free trade agreement involving 12 Asia Pacific countries: Australia, Brunei Darussalam, Chile, Japan, Malaysia, Peru, Singapore, the United States, Viet Nam, Mexico, Canada and New Zealand. The agreement would deepen economic ties between its diverse members by opening up trade in goods and services, boosting investment flows, and promoting closer links across a range of economic policy and regulatory issues.
As well as tangible benefits for our exporters and consumers, TPP would safeguard New Zealand’s longer term trading interests. TPP is potentially a platform for wider, regional economic integration. The negotiation gives New Zealand an opportunity to shape future trade liberalisation in the Asia-Pacific region in line with the high quality benchmarks set by the original Trans-Pacific Strategic Economic Partnership (P4) Agreement.
One of the objectives of the P4 Agreement between Brunei, Chile, Singapore, and New Zealand was to create a model that could potentially attract new Asia Pacific members.
When the P4 negotiations finished in 2005, its parties agreed to begin negotiating on financial services and investment (which were not covered by the original agreement) within two years of its entry into force. When these negotiations began in March 2008 the US joined the group pending a decision on whether to participate in a comprehensive negotiation for an expanded TPP agreement. In September 2008, the US announced it would participate fully in the negotiations, and Australia, Peru, and Viet Nam followed suit.
A change of administration in the US delayed the first round of TPP negotiations, but President Obama reaffirmed in November 2009 that the US would engage with TPP countries "with the goal of shaping a regional agreement that will have broad-based membership and the high standards worthy of a 21st century trade agreement". Negotiations for an expanded agreement began in March 2010 [external link]. During the third round in Brunei in October 2010, Malaysia joined the negotiations. New Zealand hosted the fourth round of negotiations in Auckland in December 2010.
At the APEC Leaders’ Meeting in Honolulu, November 2011, the Leaders of the nine TPP countries – Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the US – announced the broad outlines of an ambitious, TPP agreement that will establish a comprehensive, next-generation regional agreement that liberalises trade and investment and addresses new and traditional trade issues and 21st-century challenges.
In June 2012, Canada and Mexico were formally invited to join the TPP negotiations. Canada and Mexico, joined the negotiating table for the first time at the 15th round of negotiations hosted in Auckland in December 2012.
In the margins of the East Asia Summit in Phnom Penh, Cambodia in November 2012, seven TPP Leaders expressed their desire to see an agreement concluded in 2013.
On the 21st of April 2013 Japan was welcomed as the newest TPP participant, bringing the membership to 12. Japan joined the negotiating table for the first time during Round 18 of the negotiations hosted in Brunei, in July 2013.
For regular updates on progress in the negotiations, visit TPP Talk.
The Asia-Pacific region is a key driver of global economic growth. Roughly half of international trade, and more than 70 per cent of New Zealand’s trade and investment, flows through the region. New Zealand’s future depends on its economic relationships with Asia Pacific countries.
The 12 economies negotiating the Trans Pacific Partnership (TPP) are all doing so because they see benefits in a regional free trade agreement. Collectively the 12 TPP economies represent more than US$27 trillion in GDP. The Asia Pacific region is our home, and our economic future depends on strong trading relationships with Asia-Pacific countries. By negotiating free trade agreements, New Zealand ensures a level playing field for our exporters. If we are not involved in free trade agreements involving key trading partners, our exporters get left behind, and experience real economic disadvantages operating in offshore markets.
Five of New Zealand’s top 10 trading partners (1st – Australia, 3rd – US, 4th – Japan, 6th – Singapore, and 8th – Malaysia) are included in TPP negotiations. The TPP negotiating parties account for 45 per cent of New Zealand’s total trade.
A study by the East West Centre predicts an agreement could generate the following GDP and export gains from lowering of trade barriers and regional integration benefits:
In addition to this type of economic modelling, we know that free trade agreements help New Zealand exporters, because they have told us so. In 2009, MFAT and NZTE surveyed 854 New Zealand exporters to assess the impact of FTAs on their companies. More than 75 percent of respondents saw increases in profitability from the removal of trade barriers.
Specific benefits for New Zealand businesses from TPP are likely to include:
The US is the world’s largest economy, with over 300 million consumers. An FTA with the US has been one of New Zealand’s top trade policy goals for many years, with the US being New Zealands 3rd largest trading partner. New Zealand goods exports to the US are concentrated in the agriculture and related food sectors. New Zealand would benefit from greater access to the US government procurement market and enhanced access for our services exporters. Other potential benefits include an increase in US tourism and investment in New Zealand.
Japan, Peru, Canada and Mexico are the only other negotiating partners with which New Zealand does not already have an FTA.
The recent ASEAN-Australia-New Zealand FTA (AANZFTA) means New Zealand already has an FTA with Viet Nam. The two countries’ complementary trade relationship would be further strengthened by TPP. New Zealand businesses would enjoy an increased commercial profile for in Viet Nam (and each of the other member countries).
New Zealand and Australia have a strong bilateral relationship. Australia is our largest trading partner, with trade flourishing under CER. We worked together with Australia in negotiating AANZFTA, and TPP offers another opportunity to cooperate in a regional context.
TPP’s greatest potential, however, is as a pathfinder for wider regional economic integration. A greater degree of coherence in the regulations that govern global supply chains would streamline international trade, with benefits for businesses and consumers. Over time it would remove unnecessary duplication, reduce costs, and unleash greater opportunities for small to medium sized businesses in particular. While the negotiation involves 11 countries at the moment, the hope is that it will eventually expand to include other Asia Pacific countries.
New Zealand has already concluded FTAs with some of the TPP participants:
Consultation with business, interest groups and the wider community is continuing during the negotiating process, with information shared about progress and stakeholder input sought on negotiating goals and approaches. We want to hear from interested businesses or individuals about barriers they face in TPP markets.
Fifteen public submissions were received in response to the December 2011 call for stakeholder comment on the expressions of interest from Canada, Japan and Mexico to join the TPP negotiations to better understand the views and interests of New Zealanders with regards to these three economies. These submissions can be found here:Similarly, when it was announced in September 2008 that the US would participate in negotiations to expand the P4, public submissions were sought the following month. Sixty-five submissions were received, covering a wide range of issues. Extracts can be found here:
In addition, a structured stakeholder programme has been run in tandem with each TPP negotiating round. For example, the 112 registered stakeholder participants at the Auckland round had access to daily briefings from the New Zealand chief negotiator as well as presentations covering specific areas of interest.
If you would like further information about the TPP negotiations, please contact:
Post:
Coordinator, Trans-Pacific Partnership
Free Trade Agreement Unit
Ministry of Foreign Affairs and Trade
Private Bag 18901
Wellington
Phone: +64 4 439 8765
Email: tpp@mfat.govt.nz
If you would like to find out more about doing business in the markets covered by this negotiation, please visit the NZTE website.
