THE BIG HOLE IN THE TPP
By Richard Harman (author)
Prime Minister John Key has confirmed that New Zealand has yet to see any major concessions on dairy exports to Japan and Canada from the Trans Pacific Partnership trade agreement negotiations.
That’s because both Japan and Canada, the negotiating countries with the highest barriers against dairy imports have yet to begin the “hard” part of their negotiations.
But it leaves a huge hole in the negotiations which Mr Key admits is not what New Zealand wants.
Trade Minister Tim Groser has told POLITIK that he did not expect those negotiations to begin until the United States Congress had passed the legislation to allow President Obama to sign any TPP agreement.
It’s still not clear when that will happen.
And it’s not clear whether either country is willing to make concessions to allow more dairy imports.
Speaking at his weekly post Cabinet Press Conference, the prime Minister described the situation in Washington as “a game of chess” between the Senate and the House.
He said there was a deal on dairy products “but it’s not at the level we would currently like.
“There are more negotiations to be undertaken”
Asked what advantages New Zealand would gain, if the dairy agreement could not be reached he said: “What I’ve seen at the moment is if we froze time and concluded the deal, as I see it it’s a net positive for New Zealand.
“But it wouldn’t be nearly enough for dairy for us to be comfortable and we’d like to see more.”
Canada imposes 200 – 300% tariffs on dairy products and subsidises its local dairy farmers as well as imposing production quotas on them.
Japan imposes high tariff and uses a quota system to regulate milk powder imports.
Just over 3% of New Zealand’s dairy exports go there --- less than to the Philippines or Malaysia.
New Zealand does not export to Canada but United States dairy farmers are keen to do so.
If Canada admitted more US imports that could leave room in other markets for New Zealand.
But it is Canada that appears a bigger obstacle than Japan.
U.S. officials have told Canada’s “National Post” that while progress has been made privately with the Japanese, Canada has been “avoiding the conversation” when it comes to dealing with its supply managed industries, which inflate the price of dairy, eggs and poultry to Canadian consumers by locking out foreign products with exorbitant tariffs and limiting the amount farmers can produce.