Witty, self-deprecating and sincere, Mike Moore, New Zealand’s ambassador to the United States, made an all-out pitch to gain support for the Trans Pacific Partnership (TPP) at the 2015 Dairy Forum here in Boca Rotan, Fla, today.
The TPP, which involves 12 countries including Pacific Rim countries, the United States, New Zealand, Mexico and most recently Japan and Canada, is heading into the final stretch of negotiations. If the deal isn’t completed within the next four to six months, it would likely roll over into the administration of the U.S. president elected in 2016. And if that happens, it could take another five years to reach completion, says Moore.
Trade and trade agreements should not be idealized or demonized, says Moore. They should be recognized for what they are—negotiated agreements that can expand trade but will likely come at the cost of highly protected local industries. Nevertheless, successfully negotiated agreements can raise millions of people out of poverty, he says.
Moore acknowledges New Zealand has not always been trade oriented. “Twenty years ago, New Zealand only had one trade agreement,” says Moore.
“We’ve since changed and have become quite promiscuous. Today, we’ll trade with just about anyone,” he quips. And it has, setting up multi-lateral agreements with, among others, Australia, Cambodia, China, Indonesia, the Philippines, Thailand and Vietnam.
“[With TPP,] here’s our chance to set a high-standard agreement, and create a template for deals in other areas,” says Moore. “We ought to be ambitious. The moment we lower our standards, we will pay for it over the long term in other agreements we negotiate…. We will regret it for decades.”
But the TPP is not without controversy in dairy circles. New Zealand exports some 95% of its production, and it accounts for 40% of the dairy products traded globally. Some dairy industry officials, including some within the U.S. Dairy Export Council, fear that without some restraints on New Zealand, TPP could open the door to a flood of New Zealand imports. They argue that its national dairy company, Fonterra, is a state trading entity, akin to a national monopoly, that can set prices and then dump dairy products into the U.S. market at cheap prices.
Moore dismisses that claim. “There are no supertankers of [New Zealand] milk sitting off the horizon, waiting to bomb Boston,” he says. “We produce just 3% of the world’s milk. Milk production in just one state in India is more than that.”
He also says New Zealand per capita consumption of American produced cheese is $15 per year. Each American, in turn, consumes just a couple of dollars of New Zealand dairy products annually.
The TPP negotiations are down to their final stages. “Now we’re down to the difficult bits. We knew it would come to this—dairy, sugar and rice,” he says. “Agriculture is important in the TPP, but it’s not the only thing.
“TPP is about security and stability in the region…. Economic integration makes bad things less likely. They don’t make them impossible,” says Moore. “We live in great and historic times. Let’s hope we are big enough to do it right.”