At a press conference ending nearly a week of talks among the dozen Pacific Rim countries the ministers claimed to have made big strides towards completing a deal but not enough to get it done.
Heading into the last day there had been speculation that New Zealand’s demands on better access for its dairy exports into the big three protected markets of the United States, Japan and Canada would sink any chances of getting a deal done at this meeting.
But the Government’s agricultural trade envoy Mike Petersen said a late disagreement between Mexico and car manufacturing rivals the US and Japan meant the tough talking expected on dairy never happened.
“Dairy was certainly an issue that was outstanding at the end but it wasn’t the issue that derailed the talks.”
Petersen said there had been some improvement on what was being offered on dairy market access but it was not yet enough for the NZ industry to back a deal.
In an indication that Canada’s dairy interests were still a major obstacle in the talks Petersen said the US and Australia as well as NZ were frustrated with what was being offered by Canada which protects its farmers with tariffs as high as 250% on some dairy imports.
Throughout the talks the US has been reluctant to open up its consumer market to increased imports from NZ and Australia without offsetting gains for its dairy industry from a significant opening of the Canadian market.
Asked to confirm a foreign media report that Canada had offered to create some zero or low-tariff quota for dairy imports from all TPP countries Petersen said he did not know the exact details which were being held closely by the negotiating teams involved.
“All I know is that none of the offers are good enough. And not just for us but for the Australians and the Americans as well.”
After saying earlier in the week that only 10% of what the dairy industry wanted from the TPP had actually been offered so far the Dairy Companies Association Malcolm Bailey said there had been some further improvement but it was still not enough.
“Definitely, things have moved on from there but it was hard to see how there could be enough of an improvement so that we could have supported a deal.”
Bailey, who was joined at the talks yesterday by Fonterra chairman John Wilson, praised Trade Minister Tim Groser for holding out for a better deal on dairy before signing a final deal.
“The big thing for us is that he and the NZ negotiating team really did hang tough and we commend them for that.”
But Petersen said with the last-minute intervention from Mexico meaning the final haggling over dairy never eventuated it was still to be seen how tough a line the NZ government would take with its negotiating partners.
With most other issues resolved in the talks it was arguable whether Australia and the US would have sided with NZ and blocked a final agreement in Hawaii if the automobiles issue had not come up.
"If automobiles had have been resolved then there is every chance they would have said 'sorry dairy but in the wider interests of America and the wider interests of Australia we will let the deal go through'.
"NZ would have been placed in that difficult situation where we would have to have said we are in or we are out…but we were not tested on that.”
No date has been set for trade ministers to reconvene to overcome their remaining differences though Petersen said it would have to happen in "weeks rather than months" given US presidential elections next year would make it difficult to get a deal through Congress if it was delayed much longer.
