New Zealand Seeks To Balance Aims Of Two Asia-Pacific Trade Pacts - Bernama

November 21, 2012 14:52 PM

New Zealand Seeks To Balance Aims Of Two Asia-Pacific Trade Pacts

WELLINGTON, Nov 21 (Bernama) -- New Zealand Prime Minister John Key's support for a new Asian free trade agreement received a mixed response Wednesday, with critics saying he was ignoring an obvious conflict between the new proposed pact and the ongoing Trans-Pacific Partnership (TPP) talks.

Key has joined other leaders from Asian countries in Cambodia to launch negotiations for a 16-nation Regional Comprehensive Economic Partnership (RCEP) that would include the 10 Asean states, together with Australia, China, India, Japan, Korea and New Zealand.

"The goal is an outcome that offers New Zealand businesses improved access to key markets across Asia, and robust trade and investment rules," China's Xinhua news agency quoted Key as saying in a statement on Wednesday.

The RCEP offered the opportunity for the first time to negotiate a free trade relationship with Japan, New Zealand's fourth-largest trading partner.

"New Zealand's participation in RCEP will complement our existing free trade agreements in Asia," said Key.

"Along with our participation in the Trans-Pacific Partnership negotiations, it also underlines the government's commitment to ensuring New Zealand actively participates in the development of the trade and economic architecture of the Asia-Pacific region."

New Zealand would work closely with ASEAN and other partners to make the negotiations a success when they began next year, he said.

Critics have said the United States is using the 11-nation TPP talks as a vehicle to contain China's economic growth in the Pacific, while the RCEP includes China and neighbouring emerging economy India.

The New Zealand International Business Forum (NZIBF) said Wednesday that while the coverage of the RCEP could be even bigger than the TPP in terms of its contribution to economic welfare, they were mutually reinforcing as potential pathways to a wider Free Trade Area of the Asia Pacific.

"This negotiation will build on New Zealand and Australia's existing high quality free trade agreement with ASEAN and will bring both the giant North Asian economies and India into the same network," NZIBF chairman Graeme Harrison said in a statement.

However, Auckland University law professor and prominent TPP critic Jane Kelsey said Key needed "a reality check" if he really believed New Zealand could maintain a balance between the TPP and the RCEP.

"The U.S.-dominated Trans-Pacific Partnership Agreement is pitted against the proposed Regional Comprehensive Economic Partnership that pivots around China as well as India," Kelsey said in a statement Wednesday.

"The prime minister may not want to 'over-emphasise' the China-US stand-off, but that is now the dominant narrative of the TPP, " said Kelsey.

New Zealand Trade Minister Tim Groser had promised that New Zealand would walk away if the TPP became an exercise in "China- bashing," but this promise was "more hollow by the day."

"The TPP has now become a geo-political pact. There is a serious risk that participating governments will sign up for strategic reasons to a text that surrenders their domestic economies and grants undue influence over their policy decisions to powerful, largely US, corporate interests," said Kelsey.

The current TPP trade agreement between Brunei, Chile, Singapore and New Zealand came into force in 2006, but the United States, Australia, Peru, Vietnam, Malaysia, Canada and Mexico have joined negotiations to expand the agreement.

Japan announced its interest in joining the TPP in 2010, when the negotiations began, and Thailand voiced its interest in joining this week.

New Zealand became the first developed nation to sign a free trade agreement with China in 2008.

-- BERNAMA

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