Pressure on Japan as Canada joins TPP talks - Groser

BUSINESSDESK: Japan will be keenly watching developments in Trans-Pacific Partnership after Canada followed Mexico's lead in accepting the offer to join the Asia Pacific bloc of nations negotiating a far-reaching trade deal.

New Zealand Trade Minister Tim Groser said Japan hasn't officially asked to join the now-11 nation talks, but has been interested in the process and was testing domestic appetite for such a deal.

As the world's third-biggest economy, getting Japan on side "would be of immense significance", he said.

“I am aware that Canada’s and Mexico’s decision to join will be closely watched by other regional trade partners, particularly Japan," Mr Groser said.

"We look forward to welcoming Japan to the negotiation once Japan is ready and we have established procedures for their entry that are acceptable to their government and to ours."

The TPP negotiations, which grew from New Zealand’s P4 deal with Chile, Brunei and Singapore, have been widely opposed by anti-globalisation activists and academics over intellectual property demands made by the US and provisions that would let companies sue governments if policy decisions erode their profits.

Yesterday, Mexico accepted an invitation to join Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the US and Vietnam in a bid to create a free-trade block spanning the Asia-Pacific region that extends into aligning regulatory settings as well as removing tariffs and quotas.

Canadian Prime Minister Stephen Harper said joining the TPP will open new markets, "creating new business opportunities leads to jobs, growth and long-term prosperity for all Canadians".

The North American nation is also exploring free trade opportunities with Thailand and has begun negotiations with Japan.

The inclusion of Canada and Mexico means New Zealand may be able to bring down the barriers created by the 1994 North American Free Trade Agreement.

Canada's decision to join the talks means New Zealand agricultural producers may get easier access to a heavily protected market through a supply management regime.

In its submission on opening up TPP talks with Mexico, Canada and Japan, Business New Zealand said Canada's supply management was "particularly egregious imposing tariffs as high as 250% to 300% on dairy exports and imposing quotas on beef exports".

"Canadian membership is potentially the most problematic and should be given the lowest priority," Business NZ said.

Caroline Cretien, Canadian High Commissioner to New Zealand, said that including her nation in the TPP talks would "maximise and leverage efforts by New Zealand companies to participate in North America's integrated global value chains, as Canada and the United States largely operate as an integrated market with many industries spanning the border".

Without preferential access to those supply chains, New Zealand exporters of intermediate goods would be at a disadvantage, she said.