Rotorua Weekender: Trade and TPP must be bi-partisan

Friday, October 16, 2015

Trade policy in New Zealand has almost always been bipartisan. National and Labour have previously agreed that reducing barriers for NZ companies who export into foreign markets is extremely important for business, jobs and our economy. For our businesses to compete internationally we need high quality agreements in place which not only level the playing field but also give us an advantage over others. Former Labour Prime Minister Helen Clark was right when she recently said that it is inconceivable for New Zealand to be left behind when other nations form large and important trading blocks. Trade is good for New Zealand and it's good for Rotorua. We produce more than we can consume and need to sell these high quality products to rich consumers in other markets.

Much has been said about the Trans-Pacific Partnership agreement over many months.  As more information becomes available many of the more extreme claims are being addressed. Crazy claims that TPP would stop people protesting, that Rotorua Lakes Council would be sued by American corporations, that the government would not be able to pass laws and regulations have been rubbished.  Claims that the cost of medicines would increase by a billion dollars or that access to drugs would be reduced have now been shown to be incorrect. The Pharmac model has not been changed and there will be no change to medicine laws in New Zealand as a result of TPP.

Why is it important that we are part of TPP? Well, put simply, we get better access for dairy and duty free access for every other good and service to 11 countries that represent almost 40% of the world's economy.  That's 800 million consumers who can buy NZ produced goods and services freely without additional tariffs or costs.

We need to be part of high quality trade agreements like TPP because they mean jobs in Rotorua and in every part of the country. Over the coming weeks I will talk more about specific benefits to our economy and the significant opportunity that TPP presents.

The forestry industry in Rotorua is a big winner under TPP. The Agreement will eliminate duty not only on logs but all other processed timber products. That includes sawn timber, MDF, tables, chairs and almost everything else you can imagine.  This in-turn will encourage investment in processing at places like Lumbercube, Claymark, Redstag and Verda in Rotorua.  The more they export the more local people will be employed.

In 2014, trade with TPP countries made up a significant amount of the industry’s exports overseas. In total $1.5 billion worth of New Zealand forestry products were sent to TPP countries – all attracting hefty tariffs before entry. Thanks to TPP the industry will benefit from significant savings.

This is a great opportunity for Rotorua’s big forestry industry. The TPP will mean that exporters no longer have to pay massive tariffs for their products to enter some of our biggest markets. Ultimately what this means is less costs on businesses, potential for more trade with some of the world’s largest economies, meaning more jobs being created in Rotorua.

TPP and increasing trade in general is part of the Government’s plan to diversify and strengthen our economy, support more jobs, and provide more opportunities for Kiwis to get ahead. The deal will also have benefits for us locally – by creating more and better paying jobs thanks to reduced costs and more productive businesses.