naoto-kan24 NOVEMBER 2010: Over the course of the APEC Leaders’ Conference in Yokohama, TPP side-developments have continued apace, in part due the the Japanese government’s continued interest in the partnership.

The NZ Herald’s coverage of PM John Key’s APEC statements noted that he has drawn a hard line on agriculture, reported as saying that New Zealand ‘will not want
Japan at the table’ if it attempts to exclude agriculture from any trade deal.

He added that Japan would need to enter TPP ‘only on (New Zealand’s) terms’.

To other TPP partners, he urged that they hold firm on existing criteria and conditions rather than relaxing any entry barriers and allowing compromises for Japan to join talks, while reiterating NZ’s desire to negotiate a ‘high-quality, comprehensive’ agreement.

Leading up to the talks, Japan’s nationwide polls showed nearly half of respondents supported Japan joining the TPP. However, Japanese agricultural and forestry workers have demonstrated en masse against the prospect of talks and Japanese PM Naoto Kan’s own ruling Democratic Party have urged him to temporarily abandon the free-trade drive. Ultimately, Japan indicated at the end of APEC that it would not make a decision on joining TPP until June 2011. This may be too late for Japan to join as a negotiating partner however; it may be required to accede to a complete agreement if one is completed.

Meanwhile, at a sideline summit of TPP members, Vietnamese President Nguyen Minh Triet confirmed that his country would henceforth participate as a full member of the talks. Previously, it had held ‘observer status’, and had been required to decide before the Auckland round of talks whether it would shift to full membership.

Kan’s appearance at that summit was considered contentious enough in Japan that American officials banned television cameras from attending the meeting. The Herald’s John Armstrong reported that this had annoyed some other delegations to the summit.

A NZ Herald article on Key’s results from APEC (which also included a signal to begin non-TPP negotiations with Russia) and a CNEO piece on Japanese opposition to TPP talks appear below.

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canada25 OCTOBER 2010: Inside US Trade reports that Canada has been told by the US and other TPP parties that it is still not ready to enter negotiations.

It is understood the message was conveyed to Canada at a sideline meeting to the Brunei round at the start of October - the rationale being that a 'range of issues' existing partners had asked Canada to address have yet to be satisfactorially resolved. Chief among these are Canada's retention of a supply management system for its dairy and poultry sectors, which has led New Zealand to criticise its bid, and a perception by the US that Canada better needs to address intellectual property rights.

Canada has not stated which specific concessions it would make in its dairy sector or elsewhere, were it to gain membership.

In Brunei, Vietnam was also urged to decide ahead of the fourth round of talks in New Zealand whether or not to join as a full negotiating partner - to date, its status has been that of an 'associate member', which has saved it some of the responsibilities and commitments of full negotiating partners. Officials have not been specific as to what would occur if Vietnam could not give an undertaking as to full membership before the December round.

The US source IUT spoke to was also non-specific as to any role for Japan in the near future in TPP talks . They were clear that no informal discussion between Japan and the US has occurred to date, and indeed suggested that Japan may be perceived much as Canada - a potential party with too many domestic hurdles at present to be seen as a viable partner by members with strong agricultural sectors. It was also suggested that as the talks become more robust, US negotiators are keen to set a cap on the current nine negotiating members, requiring other states to accede in the future.



North.island.arp.300pix29 SEPTEMBER 2010: Reforms to New Zealand's Overseas Investment Act have been criticised as being 'vague' and 'weak' by political opponents and lobby groups for greater economic sovereignty.

Deputy Prime Minister Bill English unveiled changes to the Act on Monday 27th of September, aimed at introducing 'extra flexibility' to consider contentious issues such as large-scale farm sales. Ministers of parliament will be given a right of veto over transactions where NZ's economic interests are believed to be threatened. The detail on how these applications are to be considered are to be fleshed out before the end of the year.

Newly organised group Save The Farms said there was little clarity around the rules and that the veto option was simply politically expedient, while the Green Party expressed concern that the suggested reform would become overtly politicised. Independent business commentators have also criticised the change. The new rules will not take effect until December, but will affect a large Chinese firm's bid for a major chain of New Zealand dairy farms in what was intended to be the first step in securing an NZD$11.5 billion dairy business. It is presently not clear whether or how these changes would affect NZ's continued TPP negotiations.


tim_groser10 SEPTEMBER 2010: Following the TPP intersessionary talks in Peru, where the US indicated its preference for leaving existing FTAs in place while negotiating afresh with new trading partners, the NZ Minister of Trade, Tim Groser, has expressed concern about New Zealand's ability to gain the most advantageous deal out of the talks.

Australia's original FTA with the US was considered less than ideal, due to the exclusion of areas such as dairy and sugar. Groser told Radio New Zealand that he believed that under the preferred US arrangement, it would be harder for NZ to negotiate an agreement with the US that improved on the Australia-US FTA.


b-421297-Lima_Peru30 AUGUST 2010: Inside US Trade reports that while TPP members discussed complex and concrete proposals on how to structure market access agreements in any final agreement, there were seversal unresolved points at the end of a two day 'intersessional' meeting in Peru.

Sources said negotiators could not agree on how past market access schedules in previous FTA's would relate to any new schedules, or how to structure the market access talks for the TPP itself - and that these are being treated as two interrelated issues.

It is understood that the US presently favours keeping pre-negotiated market access schedules unaltered, while Australia (whose existing market access arrangements with the US exclude key products such as sugar) is arguing in favour of 'opening up' the schedules for future concessions. However the USTR disputes this interpretation, responding that talkd have been more 'nuanced'.

Proposals discussed in terms of structuring market access have included the idea of negotiating a single market access schedule while leaving scope for bilateral outcomes alongside it. Both Malaysia and Canada were present at the intersessional for bilateral talks with TPP members,  but did not formally participate in the market access talks. Canada is set to meet US trade representatives on the weekend of September 6 for more expansive talks. Both the US and NZ have expressed misgivings about Canada failing to offer sufficient dairy market access and its agricultural supply management system, should it join the talks.

Meanwhile, members of the TPP business coalition in the US are preparing revised papers for the office of the USTR ahead of the third round of talks in Brunei, with a focus on hotly-debated areas such as regulatory coherence.



nzcountryside17 JULY 2010: The NZ Herald has recently run a number of op-ed pieces, of varying rigor, about the matter of foreign investment in New Zealand following a Chinese-based company's bid to buy 16 large dairy farms presently in receivership. The matter has split commentators and lobby groups, with the normally pro-free trade Federated Farmers association saying the farms should only be sold to countries that allow New Zealanders to purchase their land in kind.

In the July 15th edition of the Herald, Council of Trade Unions economist Bill Rosenberg argues that a review of overseas investment legislation is overdue and that much stronger controls are needed, especially as the relevant sectors are deregulated by a succession of FTAs, including those presently under negotiation such as the TPP.

The full article runs below.

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cattle5 JULY 2010: The Otago Daily Times reports that US Dairy Export Council president David Suber has warned that allowing the members of NZ dairy cooperative Fonterra to trade shares amongst themselves could jeopardise the inclusion of dairy in the TPP agreement. Writing to Agriculture Minister John Carter, Suber warned that the share-trading would serve to reinforce what is perceived as Fonterra's market dominance. The proposal, which 89.95% of Fonterra's members voted in favour of on July 1, revokes the requirement for the co-operative to redeem company shares - allowing them to be traded among 11,000 shareholder members instead.

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cattle1 MAY 2010: The USTR has firmly opposed the notion of excluding the dairy sector in its entireity from any completed TPP negotiation. Inside US Trade reports there have been potential tradeoffs discussed, including US dairy concessions in the talks in exchange for the raising of barriers on imports of milk protein concentrates (which New Zealand is a major exporter of). USTR has made it clear, however that it does not presently back legislation imposing such tariffs. Additionally, the proposed tariffs on MPC's would violate US committments at the WTO, meaning the US may have to negotiate with WTO members not part of the TPP who believe the barriers might affect them.


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USTR.HTWG.photo.3-10-1016 APRIL 2010: The Washington Trade Daily reports that the USTR has met with leaders of Congress's congressional caucus on dairy farming to attempt to allay their fears about the sector being liberalised as part of any completed TPP agreement, and opened up to competition by New Zealand.Caucus co-chair Peter Welch (D-Vermont) has advocated NZ dairy trade's exclusion from the TPP, backed by a number of US dairy organisations. The WTD continues:

"Mr. Kirk told reporters he understands those concerns, but he is not ready to take anything off the table this early in the negotiations.  The first round of TPP talks took place last month. There is plenty of time to look for creative solutions that would benefit the US dairy industry, he said.  Actually this is a good time to ask what the US government can do to help US milk produces export so they can be just as competitive as New Zealand.'"

Kirk also asked the caucus and US producers to bear in mind the substantial market access the TPP could open up over multiple markets,especially should it expand to become a full Asia-Pacific multilateral agreement.

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john-key13 APRIL 2010 - NZ Prime Minister John Key has had a session with US Vice-President Joe Biden on his visit to Washington, DC, in which the two politicians discussed free trade and the TPP negotiations. Key reportedly emphasised the value of a completed TPP agreement to both states, emphasising that agricultural importing and exporting would not be a one-way street for either NZ or the US. Key's visit came after over 30 US Senators signed an open letter on behalf of their constituencies, asking that dairy be excluded from any FTA with New Zealand. A NZ Herald article has more on Key and Biden's discussion.

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canadaAPRIL 15, 2010 - The Globe And Mail alleges that Canada has missed the opportunity to take part in TPP negotiations, with New Zealand PM John Key re-emphasising that warning (while de-emphasising the risks to Canada of free trade with NZ) on his visit to Canada this week. Canadian  Prime Minister Stephen Harper's government declined joining the negotiations in 2006, primarily due to concern about the possible effect on the Quebec and Ontario dairy industries as a result of the inclusion of dairy-intensive member states such as New Zealand. The article itself cites a US source that is reluctant to admit new countries per each round of negotiations, but also quotes the Canadian Trade Minister as saying Canada is being 'kept in the picture'.

Canada currently has no free trade agreements with Asian nations. It operates a 'supply management' framework which uses price controls and quotas to regulate supply and demand in its dairy market.

Key said he hoped that Canada would eventually join TPP negotiations, but emphasised that Canada would have to enter into 'flexible and comprehensive agreements'. He ruled against exceptions from a New Zealand negotiating partner on dairy, telling journalists that such a deal would be 'unacceptable to us'. He also indicated that the strength of dairy lobbying in Canada will make further developments 'very challenging'. Key rejected any suggestion that the US is presently vetoing Canada's entry into the TPP.


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us_flag26 MARCH 2010 - John Ballingall, the deputy chief executive of the New Zealand Institute For Economic Research, has responded to the NZ Herald opinion piece by Bernard Hickey on the disadvantages of a free trade agreement with the United States. He argues that the agreement is between multiple countries rather than one between the United States and New Zealand alone, and that while dairy will be a matter of tough negotiation, it cannot be absolutely blocked in any final agreement. The full, annotated version of Ballingall's article is available online here.
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john-key23 MARCH 2010: New Zealand Prime Minister John Key has downplayed the concerns of both the US Dairy Producers Federation and a group of thirty senators regarding the negotiation of a US-NZ FTA as part of the TPP, saying he believes that the stance is a hard curtain-raising position that will later be softened. He has also said that New Zealand will not be part of any deal that excludes agriculture.

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cattleNew Zealand economic commentator and editor of interest.co.nz Bernard Hickey has written in the New Zealand Herald arguing against a NZ-US FTA. Central to his article's concerns are the possibility of an agreement where dairy is excluded, the opening-up of the NZ Pharmac system to competition, and the possibility of more stringent IP laws (New Zealand recently considered controversial reforms that would have bought it closer to the existing US framework).

Hickey's editorial comes as US and NZ dairy groups continue to dispute the effect of a FTA allowing NZ dairy farmers access into the US market. A Stuff article about the US National Milk Producers Federation's allegations against Fonterra is below the break.


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cattleMARCH 22, 2010 - In the wake of 30 US Senators writing to urge that dairy be excluded from any FTA negotiations between the US and New Zealand, NZ Trade Minister Tim Groser has said that their concerns are without substance. Today, he was echoed by Federated Farmers, who released a statement that concerns of an NZ dairy monopoly gutting the industry in North America were 'unfounded'. The Radio NZ article on Groser's response follows below the break.
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melbourneOfficials from Australia, Brunei, Chile, New Zealand, Peru, United States, Vietnam have begun talks toward the TPP in Melbourne, a move pro free-trade commentators are marking as a push for the APEC group of nations toward the long-term goal of an Asia-Pacific free trade zone. The talks are estimated to cover 470 million people, with a combined GDP of USD$16 trillion. New Zealand is sending a delegation of 15 to the talks. More below the break...(Radio New Zealand's report can be accessed here)
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ustr57As agricultural and farming blogs have been quick to seize on, the US dairy industry has come out in force on the eve of TPP negotiations. And those concerns have quickly been heard and met by a bipartisan group of 30 senators, many of whom come from the US's own dairy heartland. On March 11, they delivered a letter to US Trade Representative Ron Kirk urging that the industry is protected from New Zealand (or, more specifically, dairy co-op giant Fonterra) in any agreement between the nations. The letter itself continues below the break...
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cowMARCH 11, 2010 (Wall Street Journal) - US dairy farmers are pleading for protection from their counterparts in New Zealand as President Barack Obama's trade negotiators begin talks on a regional agreement in Australia next week.


New Zealand accounts for nearly a quarter of global dairy exports, according to Rabobank International, a large agricultural lender. U.S. dairy farmers are concerned that increased trade with the region could result in New Zealand flooding the U.S. with cheap dairy products such as cheese and milk powder that could depress prices for U.S. producers. Logistics and cost make it unlikely New Zealand would ship fluid milk to the U.S.

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us-flag-640x480WASHINGTON, MARCH 3 2010 - President Barack Obama's plan to negotiate an Asia Pacific free trade pact could have a devastating impact on the dairy, sugar and textile sectors in the United States, US industry groups warned on Tuesday.

Negotiators from the United States, New Zealand, Australia, Peru, Vietnam, Chile, Singapore and Brunei will meet in Melbourne, Australia on March 15 for the first round of talks on the proposed Trans-Pacific Partnership (TPP) pact.

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Inside US Trade, March 2 2010


Australian Ambassador Kim Beazley today (March 2) signaled that
negotiations to create the Trans-Pacific Partnership (TPP) agreement
should put all issues on the table and not automatically keep in place
exemptions from market access commitments contained in current free
trade agreements the U.S. has with some of the countries now
participating in the TPP negotiations.

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