New Zealand PM hails TPP, despite dairy disappoinment

File photo of New Zealand's Prime Minister John Key. (AFP/Marty Melville)

WELLINGTON: New Zealand Prime Minister John Key expressed frustration on Tuesday (Oct 6) that a massive newly-sealed free trade deal failed to deliver more benefits to the country's crucial dairy industry, but said the agreement would nevertheless boost the economy.

Key said the 12-nation Trans-Pacific Partnership (TPP), sealed on Monday after marathon talks in Atlanta, gave New Zealand access to a market of more than 800 million customers in the Asia-Pacific region. He estimated it would benefit New Zealand's economy by at least NZ$2.7 billion (US$1.8 billion) per annum by 2030.

Key said the TPP achieved Wellington's long-standing ambition of formalising free trade links with the United States and Japan, the world's largest and third largest economies.

"Successive New Zealand governments have been working to achieve this for 25 years," he said, arguing the deal meant "more jobs, higher incomes and a better standard of living".

But he conceded New Zealand did not achieve its goal of unfettered market access for dairy, which accounts for about a third of the country's exports. "We're disappointed there wasn't agreement to eliminate all dairy tariffs but overall it's a very good deal for New Zealand," he said.

Trade Minister Tim Groser said Wellington's negotiators battled until the final hours of the Atlanta talks on dairy but made some concessions to deliver the overall trade pact. "We had to start up high ... and we got what we could," he told Radio New Zealand.

New Zealand-based Fonterra, the world's largest dairy exporter, said the TPP was a "small but significant" step forward for the industry. "Entrenched protectionism demonstrated by the US dairy industry in particular ensured that the deal on dairy failed to reach its potential," chairman John Wilson said.

The main opposition Labour Party said TPP talks had been carried out with excessive secrecy, giving New Zealanders no say in a deal with major implications for their economic well-being.

It said the dairy industry had received "only crumbs" while there were concerns about how extending pharmaceutical patents would affect access to taxpayer-subsidised drugs.

Acting leader Annette King said the TPP could also restrict the government's ability to regulate foreign ownership and leave it open to legal action from multi-national corporations.

"The government must come clean now on what ugly compromises they have made behind closed doors," she said. "The devil is definitely in the detail in these agreements."