Trade Update - September 2014
Date Added: 23 Sep 2014 from BusinessNZ
There was no breakthrough at the most recent negotiating round in Vietnam, indeed some on the New Zealand delegation noted a lack of urgency from other negotiating teams. The basic equation has not changed. A poor quality deal that allowed Japan and Canada (and the US) to avoid difficult decisions on agriculture and automobiles could have been done by now. But this may have proved unacceptable to major lobbies in Washington and to the Republican Party. They could have killed any agreement when it went to the hill for ratification. Obama is therefore reluctant to take any risks on reaching final agreement on TPP without a negotiating authority. He can't get this prior to the mid-term elections in November, but sees a prospect for achieving agreement on an authority in the early days of the new Congress. The US will therefore delay making final decisions on TPP until the issue of a negotiating authority is resolved. If Obama is given a negotiating authority this will probably require a certain level of quality to be achieved in the negotiation. At that point the real negotiation will resume, and Japan and Canada will have to make hard choices.
The next negotiating round in Canberra in late October therefore looks to be as inconclusive as the last in Hanoi.
Minister Groser is going to great lengths to challenge a recent media story that suggests that the Korea FTA negotiation has stalled. The negotiation is at a very delicate stage, and close to the end game. There was some expectation from some industries that a deal had been done (not necessarily a high quality deal) but this has not happened. Work is underway at officials level to try and finalise a workable goods liberalisation package. No one should expect a breakthrough until perhaps meetings at APEC or the G20 in November.
Officials are set to meet in mid-October to determine the remaining work that needs to be done to finalise the FTA between New Zealand and the Gulf Cooperation Council. All signs are that the impediments to an agreement have been removed (live sheep exports for breeding purposes) but there may be some months of work ahead before the agreement is ready for signature.
The message from New Delhi is not encouraging. India is going to give priority to negotiations with developing countries. Dairy is seen as a particularly challenging issue for the new Indian Government.
There is a strong expectation that Tim Groser will be retained as Trade Minister in the new Ministry that the PM is expected to announce in early October.
It is our expectation that Tim Groser will continue on as Trade Minister post election.