5 Jun 2012

Groser says US offer on dairy not up to scratch

1:54 pm on 5 June 2012

Trade Minister Tim Groser says the United States is yet to present an acceptable offer on access to its dairy markets in the TransPacific Partnership (TPP) trade talks.

Mr Groser attending a meeting of APEC trade ministers to the Russian city of Kazan, viewed as critical to the chances of a final deal this year.

Despite two years of formal negotiations, he says, the US is yet to produce anything of substance on the dairy market, the biggest prize for New Zealand in the TPP.

"We are not going to sign up to a deal that doesn't improve the export position of our principal exports," he says. "We will wait and play our cards in the endgame."

The US wants a deal which fast-tracks new drugs in return for longer patents, and stiffer copyright protections for its creative industries in TPP countries.

Former trade negotiator Stephen Jacobi says the US must address dairy market access first and cannot hope that TPP participants will engage on other aspects unless this problem is resolved.

Last year, TPP leaders at APEC in Honolulu targeted a deal by the end of 2012 and Mr Jacobi says the meeting in Kazan will be critical in determining whether that's achievable.

However Mr Groser says many timetables have come and gone, and he is encouraged by the degree of momentum.

"Don't rule out the possibility of a very tough negotiation some time towards the end of this year, early next year."

The US Chamber of Commerce says further delays would risk the TPP stalling indefinitely.

East Asia talks

Meanwhile, Mr Groser says he's hopeful a major new trade negotiation in East Asia will complement, rather than undermine the TPP, New Zealand's number one trade priority.

China, Japan and South Korea recently agreed to begin negotaitions for a free trade deal.

The three East Asian heavyweights are currently on the sidelines of the TPP, although Japan has signalled an interest in joining.

Between them, China, Japan and South Korea, account for 20% of global gross domestic product (GDP) and 19% of exports.

Tim Groser says he's hopeful the talks will complement the nine-country TPP, and believes the two could eventually be joined to form a single free trade area of the Asia Pacific.

He says New Zealand is in a reasonable position should the Eastern Asian giants shun the TPP, with a deal with China signed, talks under way with South Korea, and negotiations with Japan being considered.