The global trade situation is going from bad to worse, says trade expert Stephen Jacobi.
The TPP deal is now not likely to see tariff elimination for dairy, but it will open new access which will benefit the New Zealand industry, says Jacobi, executive director, NZ International Business Forum.
Many issues were resolved in the Maui round of TPP talks despite a deal not being reached. Negotiations have now been narrowed down to a few issues, including dairy, motor vehicles and intellectual property, Jacobi told Dairy News.
“It is no secret to anybody that NZ needs to have satisfaction on dairy. It would be unthinkable… that a country with 25% of its exports in a particular product would say ‘we don’t need to have that included’.”
And it is not just NZ with an interest in dairy. “The United States has a very competitive dairy industry; it is a much bigger producer than NZ is,” says Jacobi. “It is also much bigger producer than NZ in terms of exports and it is a bigger exporter to the TPP countries than NZ.”
Jacobi says no FTA in the US has been approved without the support of the agriculture industry. “So while Canada and Japan may not wish to open their markets, it is not just NZ pressing them to do so. It is NZ, Australia and the US.
“There is still a lot of scope to get this agreement through. What the Government has suggested is not a goal of tariff elimination for dairy products – and that is disappointing because we wanted TPP to be a high quality, comprehensive and ambitious deal. But short of tariff elimination you can do a lot to open new access which will be beneficial to the NZ industry.”
He says TPP is now simply a matter of staying the course, keeping calm and negotiating on. There is far too much invested in the deal to allow TPP to collapse. “It is not just NZ’s interests; this is a major policy plank for President Obama who has sacrificed a lot of political capital to achieve it. This is also incredibly important for Japan and the whole reform of the Japanese economy and it is important for all the other partners who want to see a more seamless trading environment in the Asia Pacific region.
“So everyone has invested enormous amounts of time, energy and political capital.”
Jacobi believes one last push should move the negotiation forward but it will require everybody to give a little. “NZ has been prepared to give; it has given away its position of tariff elimination for dairy, so others should be prepared to open their markets.”
But negotiations haven’t worked before. “Think of the WTO; but my feeling is still that this deal will be done later this year. The longer we leave it the harder it becomes and no one wants to turn this into another WTO, so fingers crossed.”