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Rejigged TPP possible but unlikely: expert

NZ Newswire logoNZ Newswire 25/01/2017 Sean Martin

A Trans-Pacific Partnership without the US would need to be ratified by up to seven countries to come into force, a New Zealand law professor and trade expert says.

Auckland University's Jane Kelsey says legal experts considering the agreement say it's possible because the US withdrew, rather than refused to ratify the agreement, that it could still proceed.

US President Donald Trump fulfilled an election promise on Tuesday when he signed an executive order officially removing the US from the agreement, preferring to seek bilateral agreements with the individual participating nations.

But the requirements that nations making up at least 85 per cent of the participating nations' GDP ratify it before it comes into force would become more complex.

"It would require Japan, Australia and Canada all to ratify," she said.

It would then need Mexico to get to just over 85 per cent or the ratification of four others to reach the threshold.

Prof Kelsey said the new big four would be the most likely, but there were problems with that scenario including that the agreement is "worthless" to Japan without the US.

Australia's parliament is yet to approve the agreement including the US, and would also be less likely to approve an agreement not including the US.

Replacing the TPP with an agreement involving South Korea, Indonesia and China is effectively another version of the Regional Comprehensive Economic Partnership (RCEP) which involves 10 ASEAN nations, she said.

"This notion that RCEP is now going to fill the void is naive ... this is not going anywhere fast," she said.

Prof Kelsey said the model itself was in crisis and there needed to be constructive discussions about alternatives.

Green MP Barry Coates called the priorities within New Zealand's free trade agreements to be reconsidered to benefit all New Zealanders, rather than focusing on exporters.

"At the moment what we have is very obvious economic benefits in terms of tariff reductions but very complex and difficult to quantify costs of all of the other provisions in all of these agreements," he said.

"We're saying there needs to be a fundamental rethink."

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