Asia and Pacific

Moving from TPP to CPTPP

Tuesday February 06, 2018 Hillmare Schulze

The 11 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) of the Trans-Pacific Partnership (TPP) are set to sign the deal, without the United States, in March this year in Chile. This pact was reached late January this year after two days of talks in Tokyo. At this meeting the TPP was also renamed to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

 

The CPTPP includes many of the elements that were negotiated as part of TPP, as well as some significant differences.  Twenty items have been suspended from the original TPP, covering such areas as investment and intellectual property.  Two noteworthy suspensions of interest to New Zealand are:

  • Pharmac is now fully protected. According to Ministry of Foreign Affairs and Trade (MFAT) Pharmac’s purchasing model will now remain protected, including its ability to continue to negotiate the best price for medicines for New Zealanders.  Also, a provision that would have required Pharmac to make administrative changes that would primarily benefit the pharmaceutical industry has been suspended.  MFAT calculated that implementing these changes was expected to cost New Zealand an initial $4.5 million and $2.2 million per year thereafter.

  • New Zealand will no longer be required to extend the term of protection for copyright from 50 years to 70 years.  The copyright term for films and sound recordings (including recorded music) expires 50 years after the end of the calendar year in which they were made or published.  The copyright term for books, screenplays, music, lyrics and artistic works expires 50 years after the end of the calendar year in which the author died.  MFAT stated that it was previously estimated that the long-term cost of this extension would be $55 million per year to New Zealand consumers.  


Ministers of the 11 countries expect that the CPTPP will be an agreement that maintains balance of interests of member countries and takes into account their development levels. At the meeting in January, Ministers tasked officials to continue their technical work including their efforts towards finalising those items for which consensus has not yet been reached to prepare finalised text for signature.  Before our Government ratify this deal, they will have to hurry up and pass any changes to their foreign investment rules, as we assume that their capability to do so will be limited after CPTPP has been ratified.   In the interest of transparency and democracy, we hope that the Government will consult before this new deal is ratified.

 

In closing, the original prize for most of the CPTPP signatories was going to be lucrative access to the United States markets. This option might still happen in the future, post-the Trump administration, as the door has been left open for late arrivals.  But in the short term, we along with the other 10 countries, will have to make do with a more modest trade deal.