New Zealand puts free trade pact at forefront of Japan visit

SYDNEY -- New Zealand Prime Minister John Key will push for an early end to the Trans-Pacific Partnership negotiations during his upcoming trip to Japan, as part of a drive toward greater economic integration within the Asia-Pacific.

Key will visit Japan for the first time since 2012 on Tuesday and Wednesday. His spokesperson said the trip will be an opportunity for New Zealand and Japan to deepen economic ties and contribute to a high level of economic integration in the region.

New Zealand is a small country with a population of just 4.5 million. But it is the world's largest exporter of dairy products, and hopes to make further inroads in the Japanese and U.S. markets through the TPP free trade pact. Key aims to win concessions on beef tariffs and other fields that at least match those granted by Japan to Australia.

He agreed with Japanese counterpart Shinzo Abe over the need to conclude TPP talks early when Abe visited New Zealand last July, but negotiations have stalled over intellectual property rights and other contentious issues.

On Monday, before arriving in Japan, Key will sign a free trade pact with South Korea agreed to last November. South Korea is the sixth-largest destination for New Zealand's exports, and bilateral trade came to 4 billion New Zealand dollars ($3 billion) last year.

Corporate officials and Trade Minister Tim Groser will accompany the prime minister to South Korea. Groser will head to Japan with Key afterwards.

New Zealand has aggressively pursued free trade agreements with Hong Kong, Malaysia, Thailand, China and Taiwan, among others. China has since replaced Australia as New Zealand's largest trading partner, with about 20% of New Zealand's exports going to the Asian giant.

New Zealand can be more agile in the international arena because it is a small country, according to Chris Nixon, a senior economist at the New Zealand Institute of Economic Research. He says that the country can focus purely on trade relations and stay removed from territorial disputes since it is geographically far from China.

Key, now in his third term in office, has built his popularity on strong economic policies. New Zealand's gross domestic product grew 3.5% on the year for the October-December quarter. But the public is growing restless over the lack of progress on the TPP talks, and the government is eager to reach an agreement as soon as possible, Nixon says.

Negotiations could come to a standstill if the political opposition, such as the Labor Party or Green Party, takes control of the government. While New Zealand is calling for high levels of liberalization, it will likely make a compromise by, for instance, agreeing to exclude certain items from tariff reductions or extending the timeline for eliminating tariffs, says Stephen Hoadley, associate professor of politics and international relations at the University of Auckland.

Source: Nikkei