Next stop America.
That is likely to be the goal of New Zealand’s trade negotiators after yesterday’s celebration of the accession of Britain to the Comprehensive and Progressive Trans Pacific Partnership (CPTPP).
Britain’s Trade Secretary Kemi Badenoch signed the agreement at a ceremony in Auckland’s Viaduct with Prime Minister Chris Hipkins and Ministers and officials from all 11 CPTPP nations looking on.
It was appropriate the ceremony was in Auckland because Britain got there with a former New Zealand trade negotiator, Crawford Falconer, overseeing its application negotiations.
Badenoch, a strong advocate of Brexit, said Britain joining the agreement was proof that the country’s doors were open for business.
“Ultimately, our accession to CPTPP shows the world what the UK can achieve as an independent trading nation,” she said.
“Our accession means that the CPTPP becomes a truly global community spanning Asia, the Americas and now Europe, too.
“Our membership opens new opportunities and markets for British businesses, allowing them to benefit from the global economic tilts towards the Indo-Pacific.”
But for all the self-congratulatory booster-talk, the reality is the fact that Britain has joined will have little impact on New Zealand, which already has a free trade agreement with the UK which offers more than the CPTPP agreement.
Other countries taking part in the CPTPP’s Commission talks yesterday afternoon were more enthusiastic.
Singapore’s Trade Minister, Gan Kim Yong, a close ally of New Zealand inside the CPTPP discussions, said the UK’s entry into the TPP would add economic heft to the agreement and bring new opportunities for the region’s businesses and our people.
“The UK’s accession to the CPTPP is a strong statement and testament to the UK’s continued support of the rules-based trading system and demonstrates members’ desire to see the agreement remain open and inclusive,” he said.
“But at the same time, it is also important that ACP, GBP remains forward-looking, future proof and fit for purpose to meet the evolving needs of our businesses and our people.”
Trade Minister Damien O’Connor is leading a review of the CPTPP and how it might be adjusted to meet Gan’s hopes that it be forward-looking.
“Issues around digital trade are evolving all the time, and so we have to ensure that opportunities for small and medium enterprises, for women and for Indigenous people across all member states are improved,” he said.
“We’ve made general commitments, but in the five years, there’s much has moved on, and so there is widespread consensus that we need to undertake the review.
“The terms of reference will be something that officials will be working on over the next few months.”
They will also be considering six more countries who are lining up to join the agreement.
That list most notably includes China, but because the agreement countries work by consensus and because Japan and Australia have already indicated they might oppose China joining, its application looks like being a long shot.
O’Connor said that China would have to conduct separate negotiations with each member country to assure them it could meet the standards contained within the CPTPP.
Commentators have suggested China, where just over 50 per cent of the economy is controlled by the state, would have particular problems meeting the CPTPP’s restraints on state-owned enterprises.
All the more reason for the United States to join or alternatively to do a free trade deal with New Zealand.
And there is confidence within the Government that, one way or another, the US would join the party sooner rather than later.
But first, the CPTPP needs to sort out its long list of applicant countries which, apart from China, includes Taiwan(unlikely), Ecuador, Uruguay and Costa Rica, along with South Korea and a real wild card, Ukraine.
O’Connor said the Minister’s meeting in Auckland wanted to review not only the state of the CPTPP itself but also the process for considering the new applications.
“Everyone in the room is aware that trade is giving and taking, but in the end, maintaining the very high standards is something that each and every member has committed to,” he said.
He said there was much that could be learned from the British negotiations.
“It hasn’t always been easy,” he said.
“So we need to make sure that we work through to improve the process to ensure that others in line get a fair deal.”
O’Connor said the afternoon’s formal session involving the now-12 CPTPP members did not discuss any of the applications for membership.
“There was no specific discussion on any of the individual aspirants,” he said.
“We have six who have applied.
“I think it was really important, and it was a commitment that whatever progress is made is cautiously developed in a way that is fair, and that’s where we need further discussions.
“But reviewing the agreement and ensuring that those who are coming in will be coming into something that is progressive, that is up to date, is really, really important. And so that’s where most of our discussion took place.
“There was no discussion about any of the individual aspirants.”
However, he did suggest that any consideration of Ukraine’s application might be some time off.
“New Zealand is committed to supporting Ukraine in the illegal war that Russia is conducting there; we want to see it finish,” he said.
“And then obviously there’ll be a post-conflict rejuvenation, rehabilitation, rebuilding of the nation.
“And I guess the question for members will be how might we play a part in that?”
But when it comes to CPTPP membership applications, it might be a case of who you know as much as anything else.
Overseeing the British negotiations was a former long-time New Zealand trade official, Crawford Falconer, who is now Britain’s Chief Trade Negotiations Advisor.
In 1992 Falconer worked with Victoria University Economist, Sir Frank Holmes, advocating a Pacific Basin economic initiative which would include a free trade agreement, a forerunner of the CPTPP, which was eventually initiated by New Zealand, Singapore, Chile and Brunei.
It is now the largest “plurilateral” trade agreement in the world, covering 15 per cent of the world’s GDP.
But the ultimate ambition must now be to get the United States into the agreement. Maybe they should hire a Kiwi trade negotiator.
