WASHINGTON, March 30, 2016 - New Zealand has a lot to lose if the U.S. Congress fails to ratify the Trans-Pacific Partnership, Prime Minister John Key said in a speech Wednesday during a visit to Washington to attend President Barack Obama’s Nuclear Security Summit.
China is New Zealand’s largest market for goods and services, and New Zealand still lauds a 2008 free trade agreement between the two nations that slashed duties and tariffs. But the 12-country TPP would be more than twice as lucrative for New Zealand’s exporters, Key said at an event hosted by the U.S. Chamber of Commerce.
“If you look at the benefits of tariff reduction on TPP, it’s around about $275 million (on about $3 billion worth of trade),” Key said, extolling the positives of the massive trade deal for his country.
The Obama administration is also pushing for Congress to ratify TPP, arguing that agreement would be a boon for U.S. agricultural exports, among other benefits. As an example, the USDA’s Foreign Agriculture Service says TPP would provide “unprecedented access to Japan’s beef market” with the elimination of 74 percent of the country’s duties over 16 years.
Key also noted that if the U.S. were to reject TPP, other countries would move in to take advantage of the available markets.
“Everyone else isn’t going to stand still,” he said. “They’re going to go on with other things.”
The USDA has echoed that sentiment. “If the United States fails to implement the TPP agreement, it will likely lose market share to its competitors,” the department said in a statement. “Australia, Chile, Mexico, Vietnam and other countries already have preferential market access with Japan through their existing bilateral trade agreements.”
There is still strong opposition to the TPP in Congress, but Key said he’s confident the agreement will eventually be ratified. If not, the U.S. will be handicapping itself because in 20 years Asia will still be the fastest growing region in the world.
And the TPP, in the long run, will expand beyond the U.S., Japan, New Zealand, Vietnam, Canada, Malaysia, Singapore, Brunei, Chile, Peru, Mexico and Australia.
“We do see a likelihood that China will join,” Key said. “We think the Koreans will join and other countries will want to join.”