New Zealand and the TPP

In the article “TPP – What You Need To Know” ( , a brief overview of the TPP and its potential benefits to New Zealand are given. What is the TPP agreement again? Per the article it is set as a “set of trade and investment negotiations among 12 Asia-Pacific countries to cut tariffs, improve access to markets, and set common ground on labor and environmental standards and intellectual property protections. Specific to New Zealand, what are the biggest benefits? Citing the article, “agricultural tariffs either disappear of fall sharply, particularly in the heavily protected but lucrative US and Japanese markets”. It is estimated that the elimination of tariffs will save exporters $274 million a year once TPP has been adopted and implemented. With such great financial benefits, what are the possible downsides of the agreement? Some people theorize that the TPP will result in higher prices for medicine, recordings, books, and “other products affected by longer copyright periods”. Likewise, critics say that the TPP will benefit the large corporation, not the consumer. Which is correct? Which will benefit New Zealand more as a whole?

The TPP and the New Zealand Education System

The article “TPPA Threatens Quality Public Education in New Zealand” explains how the Trans-Pacific Partnership agreement could effect, and potentially damage, the public education system in New Zealand. Per the article, NZEI Te Riu Roa National Secretary Paul Goulter stated that “the deal puts at risk the rights of sovereign nations to enact laws and regulations that stop foreign edu-businesses from setting up in New Zealand, maximizing their profits and dominating New Zealand education”. This is proposed as a major threat as New Zealand currently has a “fee-free” public education system. The article states that other countries, one of which is Singapore, specifically included a clear exemption to this in their TPP agreement. New Zealand failed to do so, which has “put at risk the rights of future governments to protect public education against any changes that would disadvantage global edu-businesses”. The article concludes by reviewing that the TPP was made to be an “international trade agreement…it is not about providing free good quality public education for children and future generations”. Will this argument convince the New Zealand government to reconsider signing the bill until certain changes are made? What will the New Zealand government’s response be?

New Zealand and the Meat Industry

The article “TPP to Deliver Removal of Tariffs” is an article specific to New Zealand, the meat industry, and the effects TPP has on both. As stated in the article, “in 2014, New Zealand exports of beef, sheep meat, and co-products to TPP countries total $2.4 billion USD. This equated to over one third of New Zealand’s total exports worldwide”. Tariff costs for exports to the TPP countries totaled $94.3 million. It is estimated that through the TPP, an” estimated $72 million in tariff costs” will be saved once fully implemented and operational. Specific to New Zealand, there are three main highlights. The first is the “removal of all tariffs on sheep meat in TPP countries within eight years or less when the agreement enters the force”. The second main requisite is the “removal of all tariffs on beef in TPP countries, except Japan, within 11 years or less from when the agreement enters into force”. Last is the “reduction of Japanese tariffs on beef from 38.5% to 9% over 16 years”. These changes obtained through the TPP will “secure market access and the red meat sector’s competitiveness not only into North Asia but will further integrate New Zealand into the Asia-Pacific regional supply chains”. Are there any potential side effects? Are any other countries in the TPP hurt by the adoption of the TPP?

Good or Bad for Kiwis?

In the article “The Trans-Pacific Partnership Agreement (TPPA)” (, the author outlines several concerns specific to New Zealand and its involvement in the TPP. One of the problems the author presents are that “it will become much harder for the New Zealand government to look after our environment” because of the TPP.  It is also proposed that there will be added restrictions on foreign investment will be frozen, New Zealand will be sued by overseas companies, and medicines will become more expensive as big pharmaceutical companies gain influence over PHARMAC. Additionally, the author proposed that copyright laws will be toughened and more harshly enforced, as well as more power obtained by foreign banks and insurance companies. While many argue that the TPP would allow New Zealand to enter a more global market, the author proposed that the “they are disrespectful to the diverse communities across Aotearoa who fear the TPPA is being negotiated solely for big corporations, and not in the interests of ordinary kiwis”. Are these accusations correct? Will New Zealand end up benefiting from the TPP or being hurt by it? Only time will tell, but it is always beneficial to look at every decision from all angles, both positive and negative.

New Zealand’s TPP Position

The article “Trans-Pacific Partnership (TPP) Negotiations” analyzes the TPP, and in specific, how it could potentially benefit New Zealand. In overview, the TPP “aims to create a regional free trade agreement involving 12 Asia Pacific countries”. This agreement is proposed to deepen economic ties and benefit the economic status of all countries involved. But how will this affect New Zealand directly? Firstly, the negotiation opens New Zealand up to future trade liberalization in the Asia-Pacific region. New Zealand’s “economic future” depends on developing these strong bonds with the Asia-Pacific. If all goes according to plan, the estimated GDP gains for New Zealand are US$2 billion in 2025 ( a .9& increase). Likewise the estimated export gains are US$4.1 billion (a 6.8% increase). A few specific benefits for New Zealand businesses through the TPP are “tariff elimination and reduced compliance costs for goods exporters, more opportunities to access government procurement contracts, and reduced barriers to services trade and investment”. If the Trans-Pacific Partnership goes according to plan, it could not only open the doors for larger countries that are major economic players, but all countries involved in the agreement. New Zealand is strategically positions to not only benefit the TPP and all other players involved, but increase its own economy as well.

Thailand could benefit from TPP

New Zealand has suggested that Thailand should consider joining TPP during the public scrutiny process by member states, saying that the partnership will be world’s largest trade agreement. NZ’s ambassador to Thailand said that since Thailand was a strong trading nation and heavily reliant on exports, which accounts for 70% of its GDP, joining TPP would increase trade opportunity and ensure the country’s future growth.

Thailand is moving forward to membership of Regional Comprehensive Economic Partnership (RCEP) which has 16 countries – 10 Asean members, but RCEP can’t compensate for non partnership in TPP, whose market size and larger GDP is much larger.

Thailand should consider joining every trade agreement possible as it is important to benefit from the different angles offered by each pact, and it would help open up opportunity for the Kingdom to increase market access to all. Following the TPP’s implementation, the combined trade of its member economies will double.

For instance, New Zealand has strengths in service businesses such as education and IT, and cooperation under the TPP should help promote those sectors’ growth into other markets while other service businesses will need more investment from other countries to help develop their growth. Meanwhile in regard to bilateral trade between Thailand and New Zealand, Levermore said that almost 10 years from the implementation of their free-trade agreement, he expected there would be a revision of the FTA to promote more trade and investment growth on both sides as well as leveraging closer cooperation in many sectors.

New Zealand’s special agricultural trade envoy, Mike Petersen, said that under the bilateral FTA he expected that Thailand and New Zealand would tighten their cooperation in many sectors, particularly in agriculture as New Zealand has high expertise in the industry. Since New Zealand has high expertise in five key agricultural sectors – dairy products, beef, sheep, farming and wine – the country foresees closer cooperation with Thailand as well as more trade and investment for both sides.

New Zealand could also help transfer technology and know-how in quality agricultural production and improve capacity for Thai farmers which would in turn increase consumer satisfaction according to Petersen. Bilateral trade amounted to about Bhat 60 billion last year.

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No increased medicine costs under TPP Agreement

New Zealand will not face increased medicine costs as a result of TPP deal. New Zealand and Australia won’t change their existing policy on biologics as a result of the agreement which has created some negative feedback from American pharmaceutical companies.

New Zealand’s trade minister Groser said that New Zealand will not pay any more for medicines and the cost of subsidy will not go up by a large extent. It will roughly cost $4.5 million in the 1st year to setup the software to provide additional info. And after that $2.5m a year will be the operating costs. Prime Minister John Key was very happy with the deal as he thinks it would give their exporters better access to more that 800 million people with expected financial benefits of NZ$4.7 billion annually.

Fonterra was disappointed by limited gains for dairy in TPPA as several countries refused to remove all blocks to free trade for NZ’s dairy and beef exports. He said TPP was a small but significant step for the sector, and the dairy deal was a long game that would eventually lead to elimination of tariffs on cheese exported to Japan.

Finally, the negotiators agreed on a minimum period of data protection for next-generation biologic drugs of at least 5 years after a deadlock over rights for drug manufacturers. The US had sought 12 years of protection to encourage pharma companies to invest in expensive biological treatments.The outcome is a two-track system with an 8 year protection for biologics and status quo for all other drugs.

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