TPP: Slow and steady in Viña del Mar

by | Mar 18, 2017 | Trade Working Blog


Progress among the ‘TPP-11’ was more tortoise than hare at a recent meeting in Chile attended by Trade Minister Todd McClay, along with fellow Ministers and senior officials, but included an important affirmation of ongoing support for regional economic integration in the Asia-Pacific, and a commitment to meet again to talk about the way forward for the agreement – a slow, steady and arguably prudent approach in these uncertain times.

The Viña del Mar meeting offered a chance to reflect on next steps following US President Trump’s declaration of withdrawal from TPP in late January.  It had reportedly been hoped that the parties would agree to ratify TPP as it stands, in anticipation that the US might eventually rejoin; or that perhaps that they might agree to look at removing the more unpalatable “US” elements and going ahead with a slimmed-down agreement, perhaps even involving new members.   (See our recent Guest Blog from Tracey Epps on these possibilities.)

In the event, the meeting Communiqué was relatively low-key, noting that participants had “canvassed views on a way forward that would advance economic integration in the Asia-Pacific”.  The statement also affirmed the group’s commitment to keeping markets open, support for advancing regional economic integration and concern over protectionism.   (It is a sad reflection on the current state of trade discourse that such pro-liberalisation sentiments can no longer be taken for granted.)   While the statement did not talk about specific pathways, nor was there any overt move by participants to abandon the agreement.  (Speculation has been rife that some might now favour the bilateral track.)  The Communiqué confirmed that Senior Officials will get together to talk further over the next month, and Ministers will meet in the margins of the APEC Trade Ministers’ Meeting in May.

Clearly for New Zealand, a splintering of TPP – even if alternative bilateral FTAs could be negotiated – would be a second-best outcome.  US involvement or no, TPP would establish a strong new framework of rules for trade in the region as a whole, offering not just new market access to important markets for New Zealand’s farmers, winemakers, fishers and high-value manufacturers, but would also smooth the path for enhanced participation in global value chains (including removing much of the “grit in the machine” represented by so-called non-tariff barriers), and open up opportunities behind the border, including for our growing services sector (education, tourism and many others) and for small as well as large business.

At the same time, regardless of what happens to TPP itself, at least some of the groundbreaking elements may eventually find a home in future trade agreements – an observation made by the Mexican foreign minister after the meeting, and voiced in other settings too (see for example our report on the recent meeting of the APEC Business Advisory Council).]

This blogpost was prepared by NZIBF Associate Director Stephanie Honey.

Note: The TPP-11 consist of Australia, Brunei Darussalam, Canada, Chile, Japan, Mexico, New Zealand, Malaysia, Peru, ingapore and Viet Nam.


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