Top Shows

Contact ONE News

Business leader calls for action over Pacific trade deal

Published: 10:52AM Friday May 04, 2012 Source: ONE News

The head of Auckland's Chamber of Commerce says New Zealand cannot let another ten years pass without a free-trade agreement with the US.

Chief executive Michael Barnett said he understands negotiations for a Trans-Pacific Partnership (TPP) with the US are difficult, but said New Zealand's negotiators must make compromises to strike an agreement.

"I have difficulty in understanding why we are not sitting here today refining an agreement and celebrating five years of the benefits of the free trade principles we say we live by...nevertheless, here we are ten years on," he said.

Barnett made his comments at a NZUS Council conference at SkyCity in Auckland today.

One of the main talking topics at the conference was the TPP which involves nine countries including New Zealand, Australia, Singapore and the United States.

According to Barnett, if New Zealand can negotiate a "comprehensive, high-quality" agreement with the US, the TPP will significantly benefit New Zealand businesses.

He said the "business case" for the TPP includes increased two-way trade, lower business costs, gaining the same footing as Australia, and getting security for New Zealand's exports.

Barnett said ten more years without a deal is "too long to wait".

A pretty good start

The value to New Zealand of a trade deal with the US and seven other Pacific nations has been estimated at more than $2 billion.

Researchers in Honolulu arrived at the multi-billion dollar figure using a "conservative" economic model, according to Stephen Jacobi, executive director of the NZUS Council.

He told TV ONE's Breakfast a figure of $2.1 billion for the TPP deal is a "pretty good start".

Jacobi said: "It's an economic model that looks at the whole economy - it's not just exports. It's gains to the economy across the board.

"It's always dangerous to use figures like this because you're putting in a sand about what you might expect to achieve, but I think in view of the criticism that people want to see the numbers around TPP, this is a really good start."

He said the model, which was reviewed by New Zealand economic researchers NZIER, took into account rising GDP, tourism, and more economic and business activity.

Jacobi said the deal cannot just "be left on the table" - New Zealand needs to use every effort to get the deal through.

The ultimate gain of an estimated $2.1 billion comes after an expected addition of $350 million to the economy in the first three years.

Removing trade barriers and reducing business costs are cornerstones of the agreement.

Agricultural tariffs, a contentious issue raised in multi-lateral trade agreements like the Doha Round, could also stall the TPP, according to Jacobi.

"There's every risk that it might - and we'll see by September when the TPP leaders meet in Vladivostok in Russia at the APEC meeting just what progress they have been able to make in this area," he said.

Jacobi said the research undertaken does not forsee a complete elimination of trade barriers in agriculture and other products.