Japan announced its interest in jointing the negotiations for a Trans-Pacific Partnership Agreement (TPP) last Friday during the 16th round of negotiations in Singapore.
Japan is a major partner for New Zealand in the Asia Pacific region,” says Sir Graeme Harrison, chairman of the NZ International Business Forum (NZIBF).
“Japan has for some time been the missing link in terms of New Zealand’s network of free trade agreements in the region, although we are already committed to negotiating with Japan in the context of the Regional Comprehensive Economic Partnership (RCEP). TPP is a more ambitious negotiation and is already well underway and so we welcome Japan to both sets of negotiations which aim to deliver an even stronger economic partnership between both countries.”
Japan’s potential entry brings additional complexity which Rt Hon Jim Bolger, chairman of the NZUS Council hopes can be worked through expeditiously by negotiators. “If TPP is to play a part in the region’s economic recovery, it must be concluded as soon as possible,” he said.
Japan’s announcement was welcomed by the Acting Minister of Trade Steven Joyce, who said the expression of interest by one of the region’s largest economic players is consistent with the vision of TPP servicing as a platform for broader regional economic integration.
“The next step will be for Japan to engage in bilateral and collective consultations with all TPP participants. During those consultations New Zealand will be looking for assurances that Japan is committed to work with existing participants to achieve the ambition levels for TPP that are very clearly set out in the Honolulu Leaders/Ministers statements and also that it can contribute positively to the momentum achieved in the negotiations.”
New Zealand expects that TPP Ministers will want to discuss next steps regarding Japan’s possible entry in the negotiations when they meet in the margins of the Asia-Pacific Economic Co-operation (APEC) Trade Ministers’ meeting in Surabaya, Indonesia later this week (20/21 April), the Minister explained.
Joyce reiterated that current participants are working to achieve a comprehensive, high-standard agreement as described in the Outlines of the TPP Agreement announced by TPP Leaders in Honolulu on November 12, 2011 and are looking to conclude negotiations of such an agreement in 2013.
Japan is New Zealand’s fourth biggest bilateral trading partner, with two-way trade worth $6.1 billion in 2011. In the year ending December 2012, New Zealand exports to Japan totalled $3.21 billion. Major exports included aluminium, wood, dairy products, fruit and meat: the country was the second largest market for New Zealand beef by both volume (31,110 tonnes) and value ($196 million) during the period. Japan imports into New Zealand totalled $3.05 billion over the same period.
For the New Zealand red meat industry, beef is the most significant product for TPP connected nations and Japan’s potential inclusion in the TPP group would be a significant move for future business. However, tariffs imposed on chilled beef imports by Japan affect New Zealand’s ability to compete with other meats in the region.
In the year to end December 2012, five countries involved in the TPP negotiations featured in the top 10 markets for New Zealand beef by volume and value. Over 230,233 tonnes, worth over just $1 billion, was exported to the US, Japan, Canada, Singapore and Malaysia. The US was the largest market for beef, both in value and volume (166,845, $911 million). Over 39,100 tonnes of New Zealand lamb, worth $332 million, went to the US (New Zealand’s fourth largest market), Canada and Malaysia.
All $ are NZ$ unless otherwise stated. TPP is a negotiation for a regional free trade agreement, currently among 11 countries: Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, the US, Singapore and Viet Nam. Together, these countries represent a combined GDP of US$21 trillion and account for 28 percent of New Zealand exports.