TPP Survey promising – Stephen Jacobi

By Stephen Jacobi

A recent survey of 1018 New Zealanders found that over 60.5 per cent believed New Zealand needed to do more to connect with global markets. While 85.7 per cent could not name the deal under negotiation with the United States and other Asia Pacific economies, when prompted 51.6 per cent said they had heard of the Trans Pacific Partnership (TPP). 56.3 per cent said they supported TPP and only 13.4 per cent said they opposed it. 30.4 per cent said they had no view or didn’t care.

In the Herald recently, Jane Kelsey (“Hollywood lays down its own law” 9 October) suggested that TPP would impose significant costs on the New Zealand economy particularly in terms of the protection of intellectual property and the use of material downloaded from the internet. How can these contradictory views about TPP be reconciled?

For the time being TPP is a work in progress.

Negotiations between the now 11 participating economies are into their 15th round which will be held in Auckland from December 3 to 12. Trade Minister Tim Groser says the work is almost complete in half of the 29 chapters under negotiation. TPP is being negotiated as a “single undertaking” which means “nothing is finally agreed until everything is agreed”.

It is still too early in the negotiation to be definitive about what the final text might contain. That’s why we shouldn’t risk jumping to conclusions about any future costs likely to be imposed.

It is true that TPP is complex and ambitious. The United States is bringing challenging proposals to the table in terms of increasing protections for the creators of intellectual property.

Some New Zealand companies are supportive, particularly those involved in defending patents and copyright internationally, such as in creative and high tech manufacturing industries.

Others are concerned that too high protections across the board could penalise innovation especially if patents are applied to the fast moving software industry.

The Government will need to decide what best meets New Zealand’s interests in this area but it is more likely to do so in the context of domestic policy processes rather than a trade negotiation.

Hence the importance of the discussion of the Patent Bill which recently passed its second reading and the ongoing implementation of the Copyright Copyright (Infringing File Sharing) Amendment Act 2011.

The United States is not the only economy bringing challenging ideas to the negotiating table. New Zealand’s interest in freeing up agricultural trade is well known but equally challenging is our interest in aligning regulatory approaches across the region.

This is targeted especially at American regulators who are perhaps the least used to co-operating in this way. Similarly the Australians are interested in exploring new disciplines on agricultural subsidies and the Vietnamese and Malaysians want a major reform of trade in textiles and clothing.

There are many other examples of challenging issues from investment to state owned enterprises to labour and environment issues. If the issues weren’t challenging, TPP wouldn’t be worth doing much less taking two or three years of negotiating effort.

What can be certain is that not everything on the table will be a part of the final agreement and the more ambitious proposals will be the hardest of all.

And that’s the point – TPP is a negotiation, an attempt in a structured process to find scope for consensus where none appears to exist. It’s not for nothing trade negotiations are called the art of the possible.

That’s also why this process needs to take place behind closed doors, at least until consensus is forged.

This is not the same as secrecy – it’s no secret TPP talks are taking place in Auckland in December. At that time any public stakeholders who register their interest will be able to meet with negotiators as they have done in every other negotiating round.

Those on all sides of the TPP debate will do so and they should, to ensure negotiators are aware of their concerns. New Zealand negotiators are extremely open to this and meet regularly with those for and against TPP.

Once their job is complete the fruits of their labours will need to be presented to Parliament for ratification and all New Zealanders can participate in the select committee process.

That’s how we make treaties and change laws in this country.

The bigger picture behind all this is why New Zealand needs to participate in trade negotiations at all. The answer can be found in the difficult economic environment in which we find ourselves today. All around the world governments and citizens are asking what can be done to boost economic growth, create jobs and meet the expanding social needs of our communities.

Government coffers are largely empty, growth is anaemic at best and increased trade and investment is seen as a way to get economies growing again. A conservative estimate is that TPP could add $2.1 billion to the New Zealand economy by 2025 or just under 1 per cent of GDP.

Eliminating trade barriers, reducing the cost of doing business, ensuring supply chains can deliver goods and services to customers as cheaply and efficiently as possible – these are all outcomes which TPP aims to deliver.

Those opposed to TPP in principle need to come up with a better idea or an alternative strategy for growing the economy.

No one wants to see prices go up or the internet collapse.

Rather than giving in to doomsday scenarios we should listen to New Zealanders who instinctively know that trade works and this country’s economic livelihood is to be found in global markets.

  • Stephen Jacobi is executive director of the NZ US Council and the NZ International Business Forum.

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