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China, Russia a TPP backup: Key

NZ Newswire logoNZ Newswire 17/11/2016

Prime Minister John Key is still clinging onto hope that the Trans-Pacific Partnership will come into existence.

But if it doesn't back-up plans are already being considered.

Mr Key said in Auckland on Wednesday that the 12-nation trade agreement is still a long way from being restarted, but he believes the US will be a "massive beneficiary" and that President-elect Donald Trump could be convinced of its benefits.

"Quite quickly people are going to come at him with a stream of advice and I think that advice will be quite consistent with the advice that drove President Obama to want to be a big part of TPP, and that is US leadership in the region and US companies having access and better access into the fast growing Asian markets," he said.

TPP enabling legislation passed its third reading in New Zealand parliament on Tuesday despite the uncertainty.

To come into force the TPP must be ratified by at least six countries that account for 85 per cent of the group's economic output, meaning the US is essential.

If the US does reject the TPP, Mr Key said there was a chance China or Russia could be brought on board.

New Zealand already has a free trade agreement with China, but Mr Key said that could be upgraded through the TPP.

Discussions with Russia are on hold after their actions in Crimea, but it could be put back on the table.

"At some point ... we'll probably come back to them about that," Mr Key said.

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