TPP - what you need to know

8:53 pm on 2 February 2016

The Trans Pacific Partnership will be signed in Auckland on Thursday. So what exactly is this deal? What's at stake? Where to next?

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

So what is the Trans Pacific Partnership (TPP) agreement?

A set of trade and investment negotiations among 12 Asia-Pacific countries to cut tariffs, improve access to markets, and set common ground on labour and environmental standards and intellectual property protections.

The twelve countries represent 36 percent of the world economy.

After more than five years of negotiations, an agreement was finally reached last October in the United States.

And which countries are in it?

New Zealand, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, the United States and Vietnam.

New Zealand does not have free trade agreements with the US and Japan, two of the three biggest economies in the world, nor with Mexico, Canada and Peru.

What are the benefits for New Zealand?

Agricultural tariffs either disappear or fall sharply, particularly in the heavily protected but lucrative US and Japanese markets.

However Fonterra described the outcome as far from perfect for the dairy industry - the country's biggest export owner.

A government-commissioned study estimates the elimination of tariffs will save exporters $274 million a year when TPPA is fully implemented.

Overall, the government estimates it is worth at least an extra $2.7 billion a year in GDP by 2030.

Opponents are unimpressed.

They labelled the gains as modest, and argued the potential benefits are exaggerated.

They also say the analysis fails to account for the costs such as higher prices for medicines, recordings, books and other products affected by longer copyright periods, and more stringent patents.

Indeed, a number of groups - including political parties, unions, environmental organisations, Maori and health workers - are worried about the TPP undermining New Zealand's sovereignty.

Loss of sovereignty; I thought this was a trade agreement?

It is, but it is about much more than trade.

Remember this is also about a common set of standards to make it easier to do business in the region.

TPP critics say corporations, not workers or consumers, will be the winners.

TPPA protesters being arrested.

TPP protesters in Wellington. Photo: RNZ / Alexander Robertson

One of the most contentious provisions is corporations gaining greater rights to sue governments for introducing legislation that harms their investment.

Detractors say it will deter governments from legislating in the national interest in areas such as environment and health policy.

Not so say TPP supporters.

They point out these type of rules already exist in many free trade agreements signed by New Zealand, including the one with China.

Prime Minister John Key says no case has ever been taken against this country, and there's no expectation New Zealand will be sued in the future.

And some Maori are unhappy about the TPP?

Ratana church elders and Maori leaders have complained about the secrecy of the trade deal and want its signing to be delayed.

Maori leaders have complained about the secrecy of the trade deal and want its signing to be delayed. Photo: RNZ / Leigh McLachlan

Yes they've expressed concern the TPP will impinge on their rights under the Treaty of Waitangi.

Mr Key has faced threats of a ban from Waitangi over the trade deal.

Trade Minister Todd McClay says nothing in the TPP will prevent the Crown from meeting its obligations to Maori.

He says the agreement includes a specific provision preserving the pre-eminence of the Treaty of Waitangi in New Zealand, and the country's interpretation of the Treaty is not subject to the dispute settlement provisions of TPP.

That hasn't satisfied some.

In an analysis, Victoria University senior law lecturer Carwyn Jones says the government didn't fully engage with Maori over the TPP as it should have done under the Treaty of Waitangi.

And he says the Treaty of Waitangi exception is too weak to stop the TPP hindering the government from developing legislation and policies consistent with the Treaty of Waitangi in areas such as traditional knowledge, biodiversity and environmental management.

And the Labour Party is opposing the TPP. Why?

Labour and National have a long tradition of backing free trade deals.

But the TPP is not just a trade agreement, and the agreement's reach into areas of national sovereignty has prompted Labour to oppose the agreement in its current form.

Labour leader Andrew Little says his party supports free trade and the reduction of tariffs.

Labour leader Andrew Little

Labour leader Andrew Little Photo: RNZ / Chris Bramwell

But he says the TPP undermines New Zealand's sovereignty in not allowing a future government to ban house sales to foreigners.

Not all in Labour agree.

Mr Little has already had to give senior MP Phil Goff special permission to cross the floor to vote with the government for the agreement, while he had to discipline senior MP David Shearer for speaking out.

Will concerns about the TPP stop it being signed in Auckland this week?


Thursday's signing is largely ceremonial, and marks each country's intention to ratify the TPP.

Each country has two years to go through the domestic processes to approve the agreement before it comes into effect.

The TPP will go to the Foreign Affairs, Defence and Trade Select Committee, which is expected to hear public submissions.

The government will have to make changes to tariffs copyright and patent laws.

The deal will come into force when at least six countries, representing at least 85 percent of the combined GDP of the 12 countries, ratify it. Which means the US and Japan must be signatories.

But there is doubt the US Congress will support the deal, at least before President Obama leaves office next January.

Can countries withdraw or join?


Mr Key has backed the deal saying it's inconceivable New Zealand would not sign up.

Other countries have expressed an interest in joining including South Korea, the Philippines, Thailand and Indonesia.

John Key confirms funding for Auckland's City Rail Link.

Photo: RNZ / Diego Opatowski

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