The CPTPP trade agreement will add between $1.2 billion and $4 billion to New Zealand economy, but comes with some weighty costs if it is signed

The CPTPP trade agreement will add between $1.2 billion and $4 billion to New Zealand economy, but comes with some weighty costs if it is signed

The new look Trans-Pacific Partnership will add up to $4 billion to New Zealand’s economy (1% of GDP) once it is fully implemented.

The Government’s 250-page National Interest Analysis (NIA) on the much-anticipated trade deal, released Wednesday morning, details the benefits and drawbacks the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) will bring to New Zealand. (The full text of the CPTPP is here).

Once the overall impact of the deal is fully realised, it will add between $1.2 billion and $4 billion to annual GDP growth – that’s between 0.3% and 1% extra growth a year.

The estimates vary with different assumptions on how tariffs and non-tariff measures are addressed.

“The CPTTP would provide significant benefits for New Zealand goods exporters across a range of sectors,” the analysis says.

Tariffs (taxes on imported products) would be eliminated from most of New Zealand’s exports to all CPTPP countries within 16 years.   

The economies included in the trade deal account for 13.5% of world GDP – worth a total of US$10 trillion.

The big industry winners are dairy (expected to save $88.5 million in reduced tariffs) meat, including beef and lamb ($57 million), and Horticulture ($25 million).

Forestry, fisheries and wine will all save less than $10 million.

As New Zealand does not have free-trade deals with Mexico, Peru, Canada and Japan, CPTPP access into those markets is touted as a big win by the NIA report.

Some $5.5 billion of goods and services were exported to those four countries last year and New Zealand paid almost $300 million in import taxes to get the products to market.

New Zealand exporters to Japan, for example, will pay $200 million less in tariffs once the CPTPP is fully implemented.

The analysis suggests if New Zealand chooses not to sign the CPTPP, it would result in a $183 million decline in GDP as “New Zealand’s place in regional supply chains would be eroded,” and competitor countries exports would be cheaper.

Minister of Trade David Parker says the CPTPP is a “pretty big deal for New Zealand.

He says before the China free trade agreement, the estimated gains for New Zealander exporters was $115 million a year. That number turned out to be much higher.

Parker says the estimated gains for exports because of the CPTPP are $222 million a year.

The downsides

It’s not all good news though – the NIA outlines some areas where New Zealand would be disadvantaged by entering the deal and generate potential costs.

These are the implications of the investor-state dispute settlement (ISDS) and changes to New Zealand’s investment screening threshold for “significant business assets.”

The NIA says the ISDS mechanism has the “reciprocal potential consequence of an increased exposure of the New Zealand Government to ISDS claims.”

In other words, the ISDS mechanism heightens the risk of potentially preventing future Governments from making laws in areas of importance to New Zealand.  

However, the analysis suggests this is unlikely to happen – noting that ISDS clauses have been included in many other New Zealand free-trade agreements but have never been utilised.

There is also a separate legally binding letter between New Zealand and Australia that CPTPP’s ISDS provisions will not apply between the two countries.

As Australia is responsible for 80% of the total foreign direct investment to New Zealand, ISDS claims would not be available to 80% of all CPTPP foreign direct investment into New Zealand.

Parker says there are “a number” of other side letters like this which are being worked through but won’t say how many or with which countries.

That will, he says, all be revealed on March 8 when the deal is officially signed.

On the screening thresholds, the threshold above which a non-Government investor must get approval to invest in “significant business assets” in New Zealand would double from $100 million to $200 million for all investors from CPTPP countries.

This will require changes to the Overseas Investment Act.

National Party Trade spokesman Todd McClay says the CPTPP will deliver huge benefits to New Zealand, but the text shows there is actually few difference between the original TPP and the CPTPP.

“For example the market access provisions remain the same – in spite of Labour previously claiming they weren’t good enough, the Government can still be sued by foreign corporations, the side letter we signed with Australia restricting that ability remains and the Treaty of Waitangi protections the National Party negotiated remain in place."

He says Labour and New Zealand First might have changed the name, but it's still the same deal."

The CPTPP includes many of the same elements that were negotiated as part of the TPP but with “slight differences,” according to the NIA.

These differences include a suspension of 22 items, including areas to do with investment, pharmaceuticals and intellectual property.

A Ministry of Foreign Affairs (MFAT) analysis of the TPP – before the US pulled out – concluded the deal was in New Zealand’s interests to sign, coming with an estimated economic benefit of $624 million from reduced tariffs and barriers.

A further $1.46 billion benefit would be achieved from the removal of non-tariff barriers, MFAT’s analysis found.

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Yeah whatever - why don't we just round it up or down a few hundreds of millions because we will never know.

What we do know is that TPPA / CPTPP / CCCP / TCPIP? is not about free trade or even about trade. We already dealt with tariffs and all that in the 1990's through the WTO.

No, this is an *investor rights* agreement that puts multi-national entities on a level playing field with governments and reduces the power of countries to shape their societies & economies.

Examples: New carbon tax - no we'll sue you for that. New labour laws - no you've affected our profits, we'll sue you for that. New barriers to non-residents buying land & houses - hmmm, looks like discrimination so we'll sue you for that.

I like our new government but on this issue they are *exactly* the same as National and the Labour Govt before them and the National Govt before them. Meet the new boss - same as the old boss!

"We already dealt with tariffs and all that in the 1990's through the WTO."

Surely your assertion is at odds with the article:

"New Zealand exporters to Japan, for example, will pay $200 million less in tariffs once the CPTPP is fully implemented."

Stop putting the truth in the way of a good rant. You spoiled my day:(

Spot on.

If it is one thing we do know - The private Sector are much better at following the letter of the law than the Govt.

This has the makings of "Omni Consumer Products (OCP)" written all over it.

1%. What is the margin of error? What are the risks?

The only value of signing the CPTPP is probably to send a signal to the world that NZ is a trading nation with "higher standard".

Also, this CPTPP will probably mark the beginning of or to accelerate the formation of two divergent trading groups -- Ocean based trading countries, and Continent based trading countries (Road and Belt initiative to connect Asia, Mid-East, Africa, and Europe )

Rubbish, xingmowang. The divergence has nothing to do with oceanic or continental trading. It will have everything to do with whether nations are willing to put themselves into a Chinese headlock. And the more unaccountable, repressive and tyrannical the Chinese regime becomes, the choice becomes that much simpler. The 'Western' system isn't perfect, but a system of unchallengeable state dictums over enterprise, and little legal recourse for procedural abuses, let alone a policy of personal 'disappearances', much outweighs the known issues with CPTPP. Why, I wonder, do so few people wish to emigrate to China, and so very many wish to get out?

Glad to e-meet a westernmainstream media brain washed individual.

Why can't China be more like its neighbor country Taiwan???

Another one, here.

Nice to e-meet you as well.

Free speech..don't you just love it X!

Everything is Golden.

Insults don't change facts, xingmowang. Try to marshal rebuttals if you have them. That's how free speech works.

Tired of coming up with my own list. I quoted from someone else.

Below is only some of achievements by the CCP -- the evil Chinese government constantly portrayed by mainstream western media.

1. Defeated the fascist Japan, and signed the Charter of the United Nations.
2. Liberated Chinese people from the KMT.
3. Defeated Taiwan, earned the permanent seat of the UNSC.
4. Raises population from 0.4 billion to 1.4 billion.
5. Raises averaged life expectancy from 45 to 76.34 (data from SCIO).
6. Feed 1.4 billion people on its own.
7. Rises average literacy rate from 20% (male 30%-45%, female 2%-10%) by very low standard to 96.4% (male 98.2%, female 94.5%) by modern high standard, data from UNESCO.
Liberated Tibet.
8. Regained Dalian (or Dairen) and Port Arthur (or Lvshun) in 1955.
9. Regained Hong Kong and Kowloon in 1997.
10. Regained Macau (or Macao) in 1999.
11. Developed nuclear weapons without help.
12. Defeated both Superpowers (the US and the USSR) on battlefields.
13. Raised GDP from nothing to 2 sizes of Japan’s.
14. Operating 22,000 km domestic high speed railway, counted as 65% of the World’s.
15. Built 131,000 km domestic highway, counted as 53% of the world’s. Surpassed the US in 2013.
16. Develops low speed maglev technology, and 2 Maglev route (one in Shanghai, and one in Changsha) , being one of the 3 countries which have operated Maglev systems.
17. Built world’s largest dam, the Three Gorges Dam.
18. Develops the largest single electrical grid in the World.
19. First, and still the only one which develops UHV transmission technology, and commercializes it.
20. First develop quantum teleportation.
21. Develops the fattest and the second fattest supercomputer in the world.
22. Developing Tiangong space station on its own. (After the US isolated China from the ISS program)
23. Build Hong Kong-Zhuhai-Macao Bridge, with 6 world records.
24. Develops Beidou global satellite navigation system. (After the Europe kicked China out off the Galileo program.)

I'm not entirely sure that the Tibetans wanted to be liberated to be fair, defeating Taiwan and raising a population to 1.4BN also not something I'd be crowing about.

The defeat of the US and USSR on the battlefield? - didn't China have a minor border dispute with the USSR? No idea what the US conflict was, I've not heard of it so looking forward to being enlightened.

The Brits gave Hong Kong back, it was taken over after China was beaten in the Opium Wars if I remember history correctly

Are you sure China were the first to develop quantum teleportation? China currently has the record for the longest distance transported.

Probably referring to the Korean War in regard to defeating the US.

Fattest supercomputer? I bet they couldn't have achieved that without Mc Donalds.

You should write tourist brochures, xingmowang. How is it that a paradise on earth like this isn't overwhelmed with keen and jostling immigrants? And what reasons could there be for anyone in their right mind to want to leave the place? Yet so many do. (I'm not counting those numerous citizens who one day simply 'disappear'.) It's altogether most strange.

145 million people with diabetes and up to %40 of the pop pre-diabetic.

I think perhaps you need to look up the word "rebuttal" in dictionary.

When did they develop quantum teleportation?


xingmowang, your assertions of pride and technological achievement are remarkable. If you take an interest in history, you will discover very similar assertions (in type and purpose, not in detail) were made within and about Germany in the 1930s, and within and about the Soviet Union in the 1950s.

The human spirit and its yearnings, though, need more than these items of success. It's why all tyrannies are forced to become more and more repressive (the Chinese state currently is exemplary in this) in the continuing attempt to quell free thought. But history also teaches us that the more repressive and stifling the regime, the weaker the ultimate state. Strength lies in the complexity and difficulty of free thought - this always has options for renewal. It does not lie in adherence to a single permitted party line, no matter how brutal, how many the 'disappearances'.

Ultimately, the human will for free, complex, variable, wrong-headed, risk-taking, challenging, life breaks through - all things that give me immense pride in little, muddlied New Zealand.

Liberated Tibet??? Freudian slip that you did not give that a number??
Increased population by a billion, that does not look so flash in our overpopulated world
25 Swept the baiji (Yangtze River Dolphin) building the Three Gorges Dam, so I wouldn't crow about that too much
26 Still endangering wildlife from seahorses to elephants and rhino in the quest for their bits in dubious medicinal products.

Taiwan still stands undefeated as an independent country, despite China’s Orwellian double-speak end threats to companies and universities who describe Taiwan factually.
Why can’t China be more like Taiwan?

There are small islands just 2km off the coast of mainland China that Taiwan still owns.

Developed nuclear weapons without help? i don't think so. Mao became the worst mass murderer in history by starving 60 million of his/your countrymen to pay the Russians in the food taken from them.

Some estimates are that he was responsible for the deaths of 120 million Chinese in China.
Naturally he is still revered, and you better remember it if you want to keep your kidneys.


Once I got to Liberated Tibet-I went no further. Liberated from who? Do you really believe that the Tibetans want the repressive rule of China? Just why are so many Chinese troops stationed there?


has china given us permission to sign this agreement

... they have ... but Donald Trump hasn't .... hmmmmm ? .... ... Xi loves me - Don loves me not - Xi loves me - Don loves me not .... decisions , decisions ...

A POSSIBLE 1% rise in GDP isn't worth RUSHING into this agreement for, without FULL discussion and honest replies from Government.
We risk loosing our democracy and freedom, so rushing is NOT a good idea and doing so for a POSSIBLE 1% (+ or -, what %'age???....) is INSANE !
IMHO and those better qualified, e.g. Professor Kelsey, this agreement is Corporatism by the backdoor.
DON'T meekly walk into such an undemocratic 'agreement'.
Hold a referendum !!! Or a general election over the topic as it's impacts are potentially HUGE

Negotiations started in 2008, how is that RUSHING?

2008 was the start of the hijack of the original P4 with the US and the other fair and free trade zealots like Canada and Japan, bulldozing their way in.

Kelsey has zero credibility. Someone else please.

Pray tell, why does a law professor at the countries top university have zero credibility?

I think he means zero credibility among the neoliberal think tanks and large corporation lobby groups who're pushing their own agenda.

A bit harsh.

The University of Auckland bio reads:

Jane Kelsey is one of New Zealand's best-known critical commentators on issues of globalisation and neoliberalism. She has taught at the University of Auckland since 1979, specialising in socio-legal studies, law and policy and international economic regulation.

Jane is active internationally as a researcher, analyst, adviser and media commentators on globalisation, especially the Trans-Pacific Partnership Agreement, trade in services, and investment agreements. She is an active member of a number of international coalitions of academics, trade unionists, NGOs and social movements working for social justice.

Based on her Bio I imagine she has strong credibility with the Left. Her appearances on TV has her coming across as a negative zealot. The lack of any experience in the real world is a detraction as well for me. At least Labour are being more pragmatic.

You mean "losing", not "loosing" surely....

.. there are “a number” of other side letters .. which are being worked through but [Parker] won’t say how many or with which countries. That will, he says, all be revealed on March 8 when the deal is officially signed.

Shades of Pelosi re ACA in the US:

'But we have to pass the bill so that you can - uh - find out what's in it...'

The release of old and outdated information about the Trans Pacific Partnership will disappoint the many New Zealanders who want transparency around this controversial deal.

The National Impact Analysis above is nothing new.

The government knows many Kiwis people are opposed to this deal. That is why they are trotting outt this tired old spin.

Just look at the numbers, the treaty is our usual desperate need to sell commodity agriculture.
We would be better to accept the widely used practice of farm subsidies and pay the farmers to produce nothing.

$4B added to the economy might just about cancel out the profits exported by the big 4 banks each year.


We export around US$45 billion each year. Meanwhile, the US provides around US$25 billion in agricultural subsidies. That's how pathetic we are.

In the even bigger scale of pathetic things, we're about 0.25% of world exports.

Typical Kiwi mentality persists - Volume over Value.

One day Wellington will figure it out.

Wellington did figure it out, we didn't amalgamate our council Value over volume.
The service economy is underpinned by the real economy. Work out who produces the value to underpin the services, its scary when you go digging and find who actually produces something to get the services rolling. That and debt.

The TPP allows foreign investors to sue our governments

".. It took over four years and millions in legal fees for the tribunal to decide.."

Time to direct our kids towards a career in international law?