New Zealand leader explains what it will take for a massive Pacific trade deal to still happen
The idea of a giant Pacific trade deal isn't dead yet, even if the United States has turned its back on an agreement. Members of an 11-nation Pacific trade deal are waiting on Canada to finalize a new pact, the head of New Zealand's government told CNBC on Friday. President Donald Trump exited the ambitious Trans-Pacific Partnership (TPP) almost immediately after his inauguration in January. But the other original participants have pushed forward without the U.S. "There's enough motivation for what is now the comprehensive Pacific trade deal, but it will be really a matter of wait and see as to when and where we see that resolution from the likes of Canada," New Zealand Prime Minister Jacinda Ardern said. Throwing a last-minute surprise at member countries last month, Canadian Prime Minister Justin Trudeau declared more work was needed on the pact — formerly known as the Trans Pacific Partnership — amid concerns about what it would mean for Canadian jobs. Trudeau's no-show at a meeting of TPP members in Vietnam last month burst rising hopes for a deal, with many analysts blaming Ottawa for throwing the pact's future into doubt. Ardern, who described the current negotiating process as a "bumpy period," was previously criticized herself for slowing TPP discussions.Her almost two-months-old coalition government sought to remove so-called investor-state dispute settlements from the final agreement — an effort that proved successful. Such settlements essentially give foreign investors the right to sue governments. Those clauses "have been problematic for a number of reasons for a number of nation states," she said, adding that her administration's position wasn't unusual — it just came up late in discussions because of New Zealand's recent general election . "We went in with a particular view and managed to get a deal that looks a lot closer to [free trade] agreements that we've signed in the past, so that brought us an increase in comfort around the agreement," she continued.Japan , which has been leading talks, is looking for a quick resolution but frequent amendment requests from other members have stalled headway. New Zealand real estate At home, 37 year-old Ardern's recent decision to ban foreign buyers from purchasing existing homes — aimed at resolving soaring housing prices — also stirred unease. The move triggered worries about rising protectionism in New Zealand but Ardern dismissed those concerns. "Of course, we want direct foreign investment ... but we want it in the elements of our economy that aren't overheated and that are productive." New Zealand's residential housing market doesn't offer any gains in terms of job opportunities, she added."We welcome investment in the productive economy," Grant Robertson, the country's finance minister, told CNBC on Friday.Speaking in a separate interview, he highlighted that investment should go into "places that grow jobs that lift the value of the New Zealand economy, not into speculation." The idea of a giant Pacific trade deal isn't dead yet, even if the United States has turned its back on an agreement. Members of an 11-nation Pacific trade deal are waiting on Canada to finalize a new pact, the head of New Zealand's government told CNBC on Friday. President Donald Trump exited the ambitious Trans-Pacific Partnership (TPP) almost immediately after his inauguration in January. But the other original participants have pushed forward without the U.S. "There's enough motivation for what is now the comprehensive Pacific trade deal, but it will be really a matter of wait and see as to when and where we see that resolution from the likes of Canada," New Zealand Prime Minister Jacinda Ardern said. Throwing a last-minute surprise at member countries last month, Canadian Prime Minister Justin Trudeau declared more work was needed on the pact — formerly known as the Trans Pacific Partnership — amid concerns about what it would mean for Canadian jobs. Trudeau's no-show at a meeting of TPP members in Vietnam last month burst rising hopes for a deal, with many analysts blaming Ottawa for throwing the pact's future into doubt. Ardern, who described the current negotiating process as a "bumpy period," was previously criticized herself for slowing TPP discussions. Her almost two-months-old coalition government sought to remove so-called investor-state dispute settlements from the final agreement — an effort that proved successful. Such settlements essentially give foreign investors the right to sue governments. Those clauses "have been problematic for a number of reasons for a number of nation states," she said, adding that her administration's position wasn't unusual — it just came up late in discussions because of New Zealand's recent general election . "We went in with a particular view and managed to get a deal that looks a lot closer to [free trade] agreements that we've signed in the past, so that brought us an increase in comfort around the agreement," she continued. Japan , which has been leading talks, is looking for a quick resolution but frequent amendment requests from other members have stalled headway. New Zealand real estate At home, 37 year-old Ardern's recent decision to ban foreign buyers from purchasing existing homes — aimed at resolving soaring housing prices — also stirred unease. The move triggered worries about rising protectionism in New Zealand but Ardern dismissed those concerns. "Of course, we want direct foreign investment ... but we want it in the elements of our economy that aren't overheated and that are productive." New Zealand's residential housing market doesn't offer any gains in terms of job opportunities, she added. "We welcome investment in the productive economy," Grant Robertson, the country's finance minister, told CNBC on Friday. Speaking in a separate interview, he highlighted that investment should go into "places that grow jobs that lift the value of the New Zealand economy, not into speculation."
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