NZ diplomacy leads way on post-Trump TPP
By Richard Harman (author)
The announcement over the weekend that the 11 members of the Trans Pacific Partnership will go ahead without the USA is something of a personal triumph for Trade Minister Todd McClay.
He has been criss crossing the Pacific stimulating dialogue between the 11 about how to go ahead.
It is clear that part of his campaign has been to reframe the agreement as more than a trade agreement – as a strategic partnership designed to counter China’s influence in the region.
POLITIK understands that re-definition was particularly important in winning over Viet Nam and Malaysia who with their labour-intensive export manufacturing industries had been focussed on gaining access to the US market.
Almost immediately after becoming Prime Minister last December, Bill English, asked McClay to see what could be done to revitalise the TPP which at that stage was stalled because of the election of President Trump who would withdraw from the agreement almost immediately after his inauguration in February.
McClay and New Zealand officials began talking to the various other members of the TPP.
They found a concern among the other ten that if they each pursued individual bi-lateral deals with the US, the Trump administration would pick them off one by one but by staying together they would put the United States in a position where it was the applicant should it ever decide to join the agreement.
McClay wasted no time.
By the end of February, he had visited Australia, Singapore, Mexico and critically, Japan.
Japan’s Economy Minister Nobutero Ishihara then began to work with McClay to get the remaining TPP signatories on side.
Viet Nam was apparently particularly difficult to convince.
Foreign Minister Murray McCully was brought into the campaign and made a last-minute trip to Hanoi over ANZAC weekend as his last official act before he resigned.
Even after his meetings with the Foreign Minister neither he nor officials with him were sure what Viet Nam would do.
Then a fortnight ago McClay was invited to meet the Prime Minister – a sign that the country was ready to shift possibly because the momentum among countries travelling to Hanoi for this weekend's APEC Economic Ministers was now in favour of continuing with the TPP.
The Prime Minister, Nguyen Xuan Phuc, seemed to confirm that shift by asking McClay to co-chair the meeting of TPP countries which was held on the sidelines of the APEC meeting over the weekend.
Last night McClay said the agreement by the APEC meeting to go ahead with the PP without the US was unanimous and "better than we might have hoped for.”
”It demonstrates a commitment from all 11 countries to implement the agreement which is extremely valuable for New Zealand and sets a clear path for a meeting of leaders in November of this year," he said.
In a communique issued after the meeting, the Ministers said they would now also like to see the TPP expand "to include other economies that can accept the high standards of the TPP.”
Potential candidates might include Indonesia, Philippines, South Korea, Cambodia, Laos and Thailand.
Meanwhile, the Prime Minister has been underlining the strategic importance of the agreement.
At the conclusion of his visit to Japan, he told TVOne’s “Q+A” that the TPP had always had a strategic element to it.
“But I think it’s taken on a bit more relevance as a strategic agreement at a time when the US has pulled back, where China and Japan are taking leadership and where they’re all feeling a bit threatened and destabilised by what’s going on with North Korea,” he said.
“And we’re finding other countries reacting to all that instability by tightening up their focus and probably being a bit more interested and determined about TPP.”
National have always said they want to campaign on the TPP as an indication of an outward looking international economy.
Labour seemed relieved when the US pulled out.
"The TPP had some major flaws in it, it undermined New Zealand sovereignty, and indeed the sovereignty of the 11 other nation-states that were part of it,” Andrew Little told RNZ in February.
“There were real problems with it, as a trade deal, it didn't just deal with trade, it dealt with a whole bunch of other things that were not necessary for the advancement of trading nations."
From New Zealand's point of view, the most important parts of the TPP minus the US will be the access to Mexico and Japan.
Perhaps unfortunately for Mr English, the next big moves are not expected until November at APEC in Viet Nam – after the election.