The argy-bargy over America's proposed tariffs on steel and aluminium is set to briefly take a back seat as 11 nations sign the Trans-Pacific Partnership trade pact.
Trade Minister David Parker will join his counterparts from 10 Pacific countries for the signing ceremony in Chile on Thursday.
The deal had been on life support after the United States' withdrawal but was resuscitated in January.
The deal will eliminate 98 percent of tariffs in a marketplace worth close to $14 trillion.
Mr Parker said the deal would give Kiwi businesses preferential access to Japan - the third biggest economy in the world - Canada, Mexico and Peru for the first time.
The deal had also "increased in importance because of growing threats to the effective operation of the World Trade Organisation", he said.
According to the Ministry of Foreign Affairs and Trade's estimates, the deal is expected to give a $1.2 billion to $4b boost to New Zealand's real gross domestic product.
This included almost $86 million in expected tariff savings for the dairy industry, while the country's exporters would save about $200m in reduced tariffs to Japan alone.
Fast facts about the Trans-Pacific Partnership 11:
The TPP 11 includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
US President Donald Trump pulled America out of the deal a year ago after describing it as "a continuing rape of our country".
The TPP was a key policy of the former Obama administration's so-called foreign policy pivot to Asia.
Some opponents of the TPP fear it opens doors for companies to sue governments for policies that harm their investments. The deal has a controversial investor-state dispute settlement clause.
China isn't part of the TPP and is trying to get up a rival deal with seven TPP countries, including New Zealand, and eight others. The Regional Comprehensive Economic Partnership is much narrower and less ambitious than the TPP.
Let’s be clear – when Labour & NZ First sign the TPPA this week – it will be as cheap traitors for less than 30 pieces of silver
This deal is for those corporate interests who wish to exploit the pristine base products we produce, it is not about us protecting our future
By Martyn Bradbury
7 March, 2018
In the week Labour and NZ First sign the TPPA, let’s ask agin who is the TPPA for?
Is it for NZ or for corporate power trumping domestic political sovereignty?
It is without a doubt the latter and not the former.
The reason this is still being rammed through is testament to the truth that the Ministries run this Government and it is not the Government in charge of the Ministries.
Let’s be crystal clear. This is NOT a trade deal, it could have been, there’s a chance to fight it tooth and nail through the parliamentary process until it is, but right now it is not a trade deal.
Little economic benefit
The National Interest Analysis (NIA) reveals that the economic benefits of TPP-11 will be small, even if some of the exaggerated assumptions are included. The NIA estimates overall benefits will be only 0.3 – 1.0% growth in GDP by the time the TPP is fully implemented, in 20 years’ time.
This compares with a GDP growth of 61% in 20 years’ time without TPP-11 (using Treasury long term forecasts).
The headline from the media that there would be up to $4bn benefit from the TPP-11 uses exaggerated assumptions and ignores the timeframe. In reality, an additional 0.3 – 1.0% by 2038 from TPP-11 is a very small benefit.
This is shown in the data:
- Tariff reductions of $222m per year are 0.4% of overall exports and 1.1% agricultural exports
- They are mainly concentrated in commodities, rather than in value-added processed goods or complex manufacturers that are important to our economic future
- Tariff reductions for dairy and beef fall short of the ‘gold standard’ treaty originally promised
- Tariff reductions for dairy are 0.7% of overall dairy exports
The argument in the NIA that exports to China grew after we signed an FTA ignores the context. There was huge growth in commodity exports from Australia, Brazil and other exporters to China, whether or not they had signed an FTA. It is disingenuous to claim this as a likely scenario for exports under TPP-11.
…how spineless is that?
We are selling out for commodity exports with no added value and no future agency.
This deal is for those corporate interests who wish to exploit the pristine base products we produce, it is not about us protecting our future.
On a planet with trade wars, economic crashes and environmental apocalypses looming we need to have our hand firmly on the tiller of the nation, this deal allows over seas interests to direct our hand.
It is not acceptable.
It must be fought.
Labour and NZ First have had enough time, they can’t be excused any longer.