19 Dec 2016

Free trade deals end year on a low note

8:26 am on 19 December 2016

New Zealand's free trade supporters are licking their wounds after a year of setbacks, culminating in the demise of the Trans-Pacific Partnership.

TPP leaders including (from left) Malaysian President Najib Razak, US President Barack Obama, Mexican President Enrique Pena Nieto and New Zealand's Prime Minister John Key at the APEC summit im Manila.

TPP leaders including (from left) Malaysian President Najib Razak, US President Barack Obama, Mexican President Enrique Pena Nieto and former New Zealand Prime Minister John Key at the APEC summit in Manila. Photo: AFP

With protectionism in vogue, they fear opening up markets will get even harder.

"TPP in cold storage, the Trade in Services Agreement (TiSA) in serious difficulty, the environmental goods agreement not moving forward," International Business Forum executive director Stephen Jacobi said.

"Not a very good end of year report."

Protectionist measures have also crept up, while comments from US President-elect Donald Trump carried the threat of a trade war with China.

"It's the politicalisation of trade. We are seeing increased non-tariff measures coming into play," said New Zealand special agricultural envoy Mike Petersen.

"But we know this is hard stuff and we shouldn't just discount the progress that we continue to make. What it means for us now is that a country that relies on the world for a living is that we just have to work harder."

A sign outside the first of the government's 16 nationwide roadshow events to explain the TPP agreement.

A sign outside the first of the government's 16 national seminars to explain the TPP agreement. Photo: RNZ / Shannon Haunui-Thompson

Auckland law professor and TPP opponent Jane Kelsey said that made the free trade elite a dangerous beast.

Professor Kelsey said New Zealand was now trying to push TPP's controversial measures, like greater protection for foreign investors, through other trade pacts such as the Regional Comprehensive Economic Partnership (RCEP) and TiSA.

"The era of the true believer in these very neo-liberal forms of trade and investment agreements is over."

"Our government seems to be unwilling to actually accept that. What I'm hearing is that in negotiations like the RCEP and TiSA, is that they're [NZ officials] continuing to push an extreme line," Professor Kelsey said.

She said it was time politicians and corporate lobbyists woke up, and designed trade deals that worked for people not business.

Trade supporters like Stephen Jacobi accept some change is needed, but he is adamant the benefits to New Zealand outweigh the costs.

Donald Trump released a video detailing what his first moves would be when he becomes President.

Donald Trump released a video last month setting out actions he would take on his first day in office on 20 January, which included issuing a notification of intent to withdraw from the TPP. Photo: Screenshot / YouTube / Transition 2017

He still holds out hope TPP can be resurrected under a Donald Trump administration, despite saying the President-elect's protectionist rhetoric and focus on bilateral deals were risky for New Zealand.

"We're really in a phoney war at the moment in the United States aren't we? Because Donald Trump is not the president yet. But he is making his presence felt and that's making all sorts of nervousness creep into the global economy."

Despite the difficulties New Zealand's trade card remains full.

RCEP and TiSA rumble on, talks with the European Union are expected to start early next year, while a review of the China free trade agreement is also on the cards.

Saudi Arabia and Britain are also potential trade partners.

Trade Minister Todd McClay said free trade remained a goal for many countries.

"More protectionism does harm New Zealand. But we're not a lone voice out there talking about the benefits of trade.

"It was pleasing to see Japan ratify TPP. Now where that ends up we'll talk about next year but that sends a signal to the world that New Zealand, Japan, Australia, certainly Mexico, (and) many other countries believe trade does deliver for economies," Mr McClay said.

Certainly, getting into trade talks is not hard. But closing them is a trick that is proving more elusive than ever to master.

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