New Zealand Lead Negotiator Discusses Vision and Challenges for TPP - 21/12/2009
240845,12/21/2009 6:21,09
WELLINGTON327,Embassy Wellington,UN
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TAGS: ETRD, PGOV, NZ, ECON, ECIN, EINV
SUBJECT: New Zealand Lead Negotiator Discusses Vision and Challenges for TPP
1. (SBU) Summary. During a December 15 courtesy call, the Ambassador engaged Ministry of Foreign Affairs Trans-Pacific
Agreement Lead Negotiator Mark Sinclair on his views of the Trans-Pacific Partnership (TPP). Sinclair expressed his hope
that New Zealand and the United States will work closely to produce a ""high quality"" regional deal. According to
Sinclair, New Zealand's TPP negotiating team does not yet have a formal mandate from the Cabinet; the team plans to
first seek guidance from the Cabinet after surveying other countries' positions at the initial March round in Melbourne.
Sinclair emphasized that New Zealand is seeking a ""clean result"" without carve outs, but he cautioned that other TPP
members have residual sensitivities from previous free trade agreements already signed with the United States, which
will make it difficult to get a good result. Overcoming these obstacles will require a frank dialogue about what the
eight countries hope to achieve; this common understanding will serve as the basis for a solid TPP agreement. Sinclair
said that New Zealand feels a special kinship with the Vietnamese since New Zealand and Vietnam are the only two
countries in the TPP without a free trade agreement (FTA) with the United States. New Zealand hopes to raise the TPP
with Vietnam in bilateral discussions slated for January. End Summary.
Looking to Washington for Leadership
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2. (SBU) Sinclair emphasized that the TPP is a central element in a full bilateral agenda, and as such, it requires the
two sides coordinate closely. He also noted that since New Zealand is one of the few countries already in the TPP that
does not already have an FTA with the United States, bilateral negotiations will figure importantly. Sinclair said he
was struck by the U.S. Administration's reference to the TPP as a ""high quality regional deal"". ""This has
implications for us,"" said Sinclair, ""especially when it reaches beyond borders."" It will increase the challenges and
bring us back to the issue of political management of the process. He emphasized that the United States will need to
play a leading role in managing the political process by sending the ""right signals"" on carve outs and exemptions.
Sinclair also underscored the importance his team attaches to the working relation with the U.S. Trade Representative's
office and expressed his hopes that the two sides can work closely.
3. (SBU) According to Sinclair, New Zealand does not yet have a formal mandate for the TPP. Typically FTA negotiating
teams go to the Cabinet for guidance. However, the TPP negotiating team is waiting until after March meetings in
Melbourne. Sinclair views the meeting in Melbourne as an ""opportunity to hear what others intend for the process."" He
can then go to the Cabinet to seek guidance after he has survey the lay of the land. Sinclair said he is particularly
interested in what Washington is looking for in the TPP and asked the Ambassador for his views on the matter. In
response, the Ambassador noted that it is too early to tell.
Looking to Test the Boundaries
-------------------
4. (SBU) Sinclair cautioned that other countries that are currently part of the TPP and already have FTA's with the
United States have residual sensitivities from prior negotiations. Australia and Chile may be particularly predisposed
to being conservative on the TPP. As a result, Sinclair concluded that much of the ""intellectual effort"" will need to
come from Washington and Wellington. As the biggest player, Washington will play a very important role in coming up with
the right framework. And, to the extent possible, New Zealand wants to ""test the boundaries"" to come up with a high
quality regional agreement.
5. (SBU) Despite the fact many of the parties will have defensive sensitivities, New Zealand wants a ""clean result
across the board"". Sinclair underscored that the agreement will work best if there are ""no exemptions or carve-outs.""
He hoped quality would be the first test of the agreement, adding that it will only be made possible by integrating our
objectives. To get quality, participants will have to tackle ""at the border and behind the border"" issues, said
Sinclair. However, he was not confident that all the participant countries will want to take the risk. Sinclair saw the
diversity of players and the temptation to extend flexibilities as the biggest challenges to the process. Any exemptions
made for countries such as Vietnam will have implications for the future of the TPP since other potential members will
see an opportunity for their own carve-outs. ""Leftovers"" from other FTA's will also need to be dealt with to ensure
the TPP is a quality agreement. Certain areas, such as sanitary/phytosanitary (SPS) will be particularly challenging to
get consistent rules across the spectrum.
Need to Build a Common Understanding
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6. (SBU) The New Zealand Government hopes to first come to an understanding of what the eight countries hope to achieve
and then build on that common understanding. Sinclair added that each country is hanging on to its own ""little
fantasy"" about what is achievable. Therefore, it is important for the eight countries to openly discuss what each wants
and does not want. Each country will also have to adjust its expectations in the end. Sinclair warned against rushing
into the technical negotiations too quickly; rather, a great deal of hard work is needed at the ""conceptual level""
first, said Sinclair. It would be a mistake to allow separate negotiations to begin on individual chapters, each with
its own model. A comprehensive framework is needed first.
Working with Vietnam
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7. (SBU) Tongue-in-cheek, Sinclair noted that New Zealand and Vietnam have a special kinship because they are two of
the TPP countries that do not already have an FTA with the United States. Sinclair quipped that the two countries will
have to stick together because ""the United States will be extra tough on us."" He added that the other members of TPP
will be especially wary of Vietnam and New Zealand because they will not want to ""pay for their gains."" New Zealand
will hold bilateral discussions with Vietnam in late January or early February. Although it is a regularly scheduled
meeting, New Zealand wants to put TPP on the table. (Comment: MFAT officials have told us on numerous occasions that New
Zealand wants to partner with the U.S. on encouraging Vietnam to accept sensitive provisions in the TPP, such as
environmental and labor standards. They note that the United States working alone may appear too heavy handed.)
CLARKE",21/12/2009
ENDS