Todd McClay: Saving the TPP --- and boosting the Pacific
By Richard Harman (reporter) , Reuters News Agency (reporter)
In two weeks of frantic globe-trotting Trade Minister Todd McClay has finished one agreement and breathed new life into another.
McClay yesterday, along with Ministers from Australia and ten Pacific Island countries concluded talks in Brisbane on the historic PACER Plus trade agreement.
POLITIK understands a parallell agreement negotiated at the same time includes a provision allowing more Pacific islanders to come and work in New Zealand.
Meanwhile, McClay has been quietly leading the way on getting agreement from the TPP countries to implement that agreement without the United States after President Trump withdrew in January.
The two agreements are very different.
PACERPlus is really more of a developmental aid deal than a trade deal.
And New Zealand has also agreed at the same time to allow increased numbers of Pacific Island workers to come here on temporary visas to help with work like horticultural harvesting or the Canterbury rebuild.
The new agreement will extend the industries where the workers can be employed.
POLITIK understands one proposal would see Samoan hotel workers come here to gain experience in New Zealand hotels during their off season.
At the same time the actual PACERPlus greement includes a development package of more than $55 million that will help raise standards of living, create employment opportunities and increase export capacity in Pacific Island countries,” McClay says.
Nevertheless, over time it will see tariffs in Pacific countries reduced for New Zealand exports.
That may pose some issues for some countries which rely on tariff income to fund their Government, and the $55 million package will in part assist with things like improving their income tax collection processes.
Apart from New Zealand, the other countries involved in PACERPlus are: Australia, Cook Islands, Federated States of Micronesia, Nauru, Kiribati, Niue, Palau, Republic of Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu.
Ironically the two largest island economies in the region – Papua New Guinea (PNG) and Fiji --- both stayed away from the Brisbane talks.
PNG’s Prime Minister, Peter O’Neill, said in Hong Kong last month that his country could not sign up for a deal which took jobs away from PNG.
Fiji has been in and out of the negotiations, but McCVlay said the door was open for both them and PNG to join the agreement at any time.
“We respect their decision,” said McClay.
“We thin kit is a high-quality agreement that will deliver for all of the economies but it was a collective decision of the other 12 Pacific Island countries in Brisbane and New Zealand that we should go ahead.
“We’ve established an enhanced faster procedure for Fiji and PNG to join at a time when they are ready, and we will remain engaged with them."
And in some ways, that's a similar approach to one that is now being used with the TPP.
The 11 countries other than the United States will meet in Viet Nam at the APEC Trade Ministers’ meeting next month, and they will be talking about how to ahead without the US.
Prime Minister Bill English said on Tuesday that New Zealand was playing a leading role in getting agreement to move on with the TPP.
McClay has been co-ordinating this among TPP members because New Zealand is the depository country for the agreement.
The big breakthrough has come with Japan wanting to move ahead. McClay was there a fortnight ago.
Mexico's Economy Minister Ildefonso Guajardo confirmed on Tuesday that the TPP might still be implemented by making adjustments to its text even though the United States has withdrawn.
The TPP which had been promoted by former U.S. President Barack Obama and Japan as a way to counter China's influence in a fast-growing region, was written in a way to prevent implementation without the United States.
But if Japan leads the way, that clause could be stripped out without "any problem," and Mexico and other members could evaluate the pros and cons of pushing forward with the TPP without the United States, Guajardo said.
McClay told POLITIK that New Zealand was now working with Canada, Japan, Australia and Singapore to try and move things on.
“I would hope we might have a decision by the time of the APEC meeting in Viet Nam in November,” he said.