Here are some excerpts from an excellent Tracy Watkins piece on Stuff today:
Prime Minister John Key and his Japanese counterpart Shinzo Abe may sound like they are speaking the same language on trade, even if they remain miles apart on the other hot potato in the relationship, whaling.
But in reality, the gap between them may be almost as wide on both fronts…
Ahead of yesterday’s meeting, Key had suggested that if Japan’s inclusion in the TPP threatened the goal of achieving a tariff-free Asia Pacific trading bloc it should be excluded.
Abe issued a pointed reminder at the start of his press conference in Auckland yesterday that Japan is the world’s third largest economic power. As such, its inclusion gives the TPP a “strategic” edge, without which the ambitious trade agreement is unlikely to get over the line with the United States. The sub-text was that Japan gets to call the shots, not New Zealand.
Key’s reference to New Zealand being prepared to show some patience over the thorny issue of tariffs was an acknowledgement of that fact.
It also suggests that Abe’s stated desire for a comprehensive and high-quality agreement does not come without strings and that it will fall well short of New Zealand’s ideal for a “comprehensive” agreement.
And therein lies the rub. As I have posted before, New Zealand has almost no leverage in 21st century trade talks, partly because of our size and party because we gave away almost all our bargaining chips in the 1980s and 1990s. The “unilateral tariff reductions” of that time may have helped the theory-driven trade negotiators sleep easier, but they did nothing to help the next generation of negotiators get anything done.
The 12 country TPP is better thought of now as a bilateral US/Japan deal with as many hangers on as would like to hang on. The trapping are still of a 12 country deal, of course. But these things always end up with a small club huddled in a smoke-filled room, while the others sit outside in the cold. The TPP club is Barack, Shinzo, and nobody else. That’s realpolitik.
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