Another TPP meeting, another failure to reach agreement.
Yet the words used to describe the negotiations did not, once again, talk of defeat.
Instead, the joint statement by the TPP Ministers said: “We have made significant progress and will continue work on resolving a limited number of remaining issues, paving the way for the conclusion of the Trans-Pacific Partnership negotiations.”
Yet the hurdles highlighted as sticking points going into the talks proved to be same issues holding up an agreement.
And as Trade Minister Tim Groser said, one of those is the main prize for New Zealand in these talks.
“You can see clearly that there are one or two really hard issues, and one of them is dairy.”
But Mr Groser is nothing if not an optimist, expressing confidence there is a solution that will benefit New Zealand’s dairy farmers and those in countries resistant to opening up their markets, like Canada and Japan.
Mr Groser admits total tariff removal is off the agenda, and he was no mood to give in in Hawaii.
The reporting in Australian media was a bit different. According to them it was their negotiators who held tough and refused to give in. But they also report:
According to industry figures currently in Maui, Hawaii, for talks on the Trans Pacific Partnership Agreement (TPP), the US is not sticking to a position agreed to 18 months ago which was to be the starting point for this round of negotiations.
“When we heard, we were absolutely devastated by it because it put us back so much,” Australian Dairy Council chairman Noel Campbell said.
According to Mr Campbell the US now will not budge unless Canada opens its markets.
So the latest round of talks sounds like it was a huge step backwards, rather than the amazing progress Groser’s trumpeting. And this round was supposed to be the big breakthrough timed to prevent domestic political constraints in various member countries from contaminating the process. There are now so many participants with so many conflicting vested interests that the windows for advancement are very small. Actually, it now looks like those windows don’t exist.
Back when New Zealand signed the Free Trade Agreement with China, Helen Clark admitted it happened because we’re such a small economy. We were China’s first FTA because we were a harmless test-case for them, and we used our small size to our advantage to leverage a good deal. The original TPP arrangement was supposed to work a bit like that. New Zealand and the other signatories – Chile, Singapore and Brunei – would conclude a high quality deal covering off all the big problems in modern trade, and then when other larger economies saw how well it worked we would gradually lure them in.
Why didn’t that happen? One of the main reasons, I suspect, is the hubris of the Trade Minister and the senior staff at MFAT. Tim Groser made a comment the other day about how the TPP talks needed to remain secret from the New Zealand public because it was a task for adults ‘not breathless children’. Groser is very much a product of the culture of elitism at our Foreign Ministery. ‘The finest minds in New Zealand do not go into business or science or medicine,’ MFAT assures itself. ‘They become diplomats. MFAT is the best of the best.’ They’re the Top Gun of the public service, according to themselves. They’re the people who know what’s best for the country. They understand the way the world works. They’re the adults in the room.
Groser takes that self-regard a step further, and seems to think he is the best of the best of the best. World class. A major player of world historical significance. A global titan of international trade. And why should such a man waste his priceless time patching together a deal with the likes of Chile and Brunei? Why not Canada, too? Mexico? Japan? America? Why not put together the greatest trade deal in the history of the world? Why should he do anything less?
Because it isn’t going to work, seems to be the answer. If we had a small, highly successful trade pact and larger economies were negotiating to try and access it, as per the original plan, then we’d be bargaining from a position of strength. Instead we have some of the largest economies in the world dictating terms to us. Groser’s singular genius – whether real or a pathetic self-delusion – is running up against the hard reality that vested interests in those exponentially larger economies simply do not have to give us anything no matter how dazzlingly brilliant our diplomats think they are. We have no leverage – except to walk away, which is something our negotiators will be loath to do because they have so much invested in the process.
We don’t know what the benefits of TPP are – according to MFAT they’re trivial: a couple billion dollars by the year 2025, To put that in perspective, our trade with China is worth about $20 billion a year now and we didn’t have to sign away our own sovereignty to get it. And even if we achieve our big win – access to the US and Japan for dairy – we’re already hitting the environmental limits of our dairy production capability. And there’s a global glut in the dairy market. US farmers are currently pouring their excess milk into abandoned mines.
The best outcome here seems to be failure. The other negotiators realise it isn’t going to work and let the deal fall over, and then we can go back to the original plan of high quality arrangements with comparable economies who we can bargain with in good faith. That was a smart idea.