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TPP Amendment Bill passes third reading, despite likely demise of TPP

17 November 2016

The Government has forged ahead with the third reading of the Trans-Pacific Partnership Agreement Amendment Bill, despite the fact that the trade deal is unlikely to proceed following Donald Trump's election as US President.

The TPP Amendment Bill passed 61 votes to 57. It will come into force by Order in Council "on the the date on which the Trans-Pacific Partnership Agreement, done at Auckland on 4 February 2016, enters into force for New Zealand."

What was the bill?

Although most of New Zealand’s obligations under the Trans-Pacific Partnership Agreement could be met by existing domestic legislation, some legislative changes were still necessary. The Bill made those required changes, except for obligations relating to plant variety rights.

None of the legislative changes introduced by the Bill will be implemented unless the TPP comes into force for New Zealand – something that looks highly unlikely after Donald Trump’s success in the US election. The US President-elect is opposed to the 12-nation free trade deal, and during his election campaign said he would withdraw the US from the agreement.

The bill makes amendments to the Copyright Act 1994, the Customs and Excise Act 1996, the Dairy Industry Restructuring Act 2001, the Hazardous Substances and New Organisms Act 1996, the Legislation Act 2012, the Overseas Investment Act 2005, the Patents Act 2013, the Tariff Act 1988 and the Tariff, the Trade Marks Act 2002, and the Wine Regulations 2006.

Why is the TPP looking dead in the water?

Without US support, the trade deal will not be able to proceed, as it needs to be ratified by at least six countries that account for 85% of the TPP’s member nations’ gross domestic product. That 85% threshold can’t be met without the United States.

After Mr Trump’s election win, New Zealand Prime Minister John Key said the 12-nation trade agreement was unlikely to be signed off in the US. “It’s hard to believe that Congress is now going to vote for something he (Trump) is so opposed to,” Mr Key said on the Paul Henry show.

However, current US Secretary of State John Kerry, who was recently in New Zealand, is hopeful that the TPP will eventually be passed.

"As people examine it and get beyond the campaign and get to dig into it, my hope is that it can summon the support that it needs and if not immediately, that there are tweaks here and there, and things that could be done in order to address some of the concerns that people have,” Mr Kerry told a press conference in Wellington, after the US election.

"I think we have to wait and see where we wind up on this debate as the new Administration comes in next year."

New Zealand’s Trade Minister Todd McClay has acknowledged there were obstacles to the TPP coming into force, but said New Zealand would give the new US administration time to fully consider its trade agenda. He said the passage of the Bill was a signal of New Zealand’s commitment to the continued liberalization of international trade.

“At times when there is uncertainty in the rest of the world, New Zealand’s consistent and trusted voice of negotiating trade outcomes that are good for our economy needs to be heard.”

Who was party to the TPP?

The partner nations involved in the TPP are New Zealand, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, the United States and Vietnam. The TPP would have been New Zealand’s first free trade agreement with the US, Japan, Canada, Mexico and Peru. New Zealand already has free trade agreements with the other six parties involved with the TPP.

New Zealand’s Ministry of Foreign Affairs and Trade estimated the TPP would add at least $2.7 billion a year to New Zealand’s GDP annually by 2030, through reduced tariffs and opening up new market opportunities.

Related information

TPP Agreement Amendment Bill passage recommended.

The TPP and patents in New Zealand.

New Zealand Law Society submission on the Bill.

Last updated on the 16th September 2019