Impatience with long-running world trade talks, and a desire to snap out of slow economic growth, explain why countries are flocking to a U.S.-led Asia-Pacific free trade agreement, New Zealand Trade Minister Tim Groser said.
“It’s not just frustration with the WTO farce going on interminably and losing momentum. There’s a broader influence from concern about how we’re going to grow our economy and create jobs,” Groser said in an interview.
The Trans-Pacific Partnership (TPP), a proposed free trade pact covering nine countries in the Asia Pacific, has picked up steam over the past several days, with Japan, Canada and Mexico all expressing interest in joining the talks.
President Barack Obama and other leaders of the nine TPP countries announced they had reached agreement on the broad outlines of a deal and were determined to move to a final agreement as rapidly as possible.
While the New Zealand minister said he was delighted by the three new applicants to TPP, it was “not realistic” to absorb them into the full talks and meet the 2012 deadline. Instead some political deal must be struck on how to include them.
The push for a regional trade deal comes as the Doha round of world trade talks, involving the 153 members of the World Trade Organization, are about to enter their 11th year with no end in sight.
WTO ministers will meet next month in Geneva, but Groser said he was pessimistic of significant progress there.
Meanwhile, a severe financial crisis in Europe threatens exports to key market for the United States and many other countries around the world.
“We know that whatever happens in the euro zone, the best result is slow growth for the next five years. We know there’s a different story in Asia ... If you want to be part of that, get on board,” said Groser, who has worked as a trade negotiator for 30 years.
Consolidate First, Then Expand
The nine countries currently participating in the TPP talks are the United States, Australia, New Zealand, Vietnam, Singapore, Malaysia, Brunei, Chile and Peru.
New Zealand is “delighted” that Japan and others now want to join the TPP, which was also envisioned as a platform to create a free trade area covering all 21 members of the Asia Pacific Economic Cooperation (APEC) forum, which is holding its annual meeting this week in Honolulu, Groser said.
But after nine rounds of negotiations on the pact, it’s not possible to move any of the three countries seamlessly into the negotiations and still expect to finish in 2012, which the goal the current countries have, he said.
“I don’t think anyone can seriously imagine that we can complete this negotiation with economies as important as these three by the end of 2012. That is not realistic,” Groser said.
“To me, the game is to consolidate the whole deal—I don’t want to be precise about how far—but to consolidate the nine and then reach some political agreement about who and under what conditions others come in.”
Groser said he expected other APEC members to also express their interest in joining the negotiation, although there is no sign of China doing that any time soon.
“Longer term, the whole idea was to get everyone involved. But that would be a massive decision on the part of Beijing and Washington,” Groser said, stressing New Zealand has excellent trade relations with both countries. (Reuters)