Last week, negotiations for the Trans-Pacific Partnership (TPP) Agreement were successfully concluded. That’s great news for New Zealand as it will deliver significant benefits for our country.
TPP is New Zealand’s biggest ever trade deal, with an estimated benefit to our economy of at least $2.7 billion a year by 2030. It involves 12 Asia-Pacific countries, which together account for 36 per cent of the world’s economy.
As a small country relying on exports, New Zealand can’t get rich selling things to ourselves. That’s why better access to the more than 800 million customers across the 11 other countries in TPP will make all the difference. Last year, New Zealand sold $28 billion worth of goods and services to those countries. Successive New Zealand governments have sought free trade agreements with the United States and Japan – the world’s largest and third largest economies – for the past 25 years. Both those countries form part of TPP.
TPP will allow Kiwi exporters to sell more products and services to the world, boost our economy, and support more jobs and higher incomes back in New Zealand. It eliminates tariffs on 93 per cent of New Zealand’s exports to the United States, Japan, Canada, Mexico, and Peru and means New Zealand now has free trade relationships with our top five trading partners.
TPP will save New Zealand exporters $259 million a year in tariffs they currently have to pay just to get their products into these markets. Take the New Zealand dairy industry for example. This deal will save them $102 million on the $4.6 billion worth of products exported to TPP countries. Other industries set to save millions of dollars in tariffs include meat, wine, horticulture and forestry. Tariff savings are just the start of the benefits this trade agreement offers to New Zealand. Barriers to access are often even more important to exporters. Eliminating these barriers will unlock enormous opportunities.
Now that TPP negotiations have concluded people will see many of the concerns raised previously have not been reflected in the agreement. For example, New Zealanders will not pay more for subsidised medicines. The signing of TPP is great for New Zealand. It builds on the National-led Government’s wider plan to diversify and strengthen our economy, support more jobs, and provide more opportunities for Kiwis to get ahead.