New Zealand says Pacific trade deal will boost GDP 1 percent
New Zealand estimates a Pacific trade deal would boost its economy by up to 1 percent as exporters would face reduced tariffs on goods like kiwifruit, wine and beef.
The analysis Wednesday came as details of the trade pact between 11 countries around the Pacific Rim were released. The countries, which include Japan, Canada and Australia, intend to sign the deal in March. But it won't come into force until it's ratified by individual nations.
President Donald Trump fulfilled a campaign promise by pulling the U.S. out of an earlier version of the deal, previously called the Trans-Pacific Partnership.
New Zealand estimates the deal would expand its economy by up to 4 billion New Zealand dollars ($2.9 billion) a year, according to the analysis released by the Ministry of Foreign Affairs and Trade.
The analysis concluded that not signing the deal would slightly shrink GDP as the nation lost ground to competitors who had signed up.
"On balance, we believe this agreement is clearly in the interests of New Zealand," said Trade Minister David Parker.
The liberal Labour Party, which now leads the government, had expressed doubts about the agreement when it was in opposition last year. But Parker said it had managed to address those concerns, in part with new laws that will restrict the sales of New Zealand homes to foreign buyers.
He said one contentious part of the agreement, which allows investors to sue foreign governments, had been narrowed in scope, although New Zealand remained opposed to the provision in its entirety.
The pact, now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, faces an unusual path through New Zealand's parliament.
The Labour Party plans to team up with its traditional rival, the conservative National Party, to ensure the legislation passes. That's because Labour ally the Green Party remains opposed to the pact.
Parker said people's broader economic concerns like the concentration of wealth, multinational tax avoidance and disruptive technology often got unfairly wrapped into the free-trade debate.
"I think the groundswell of opposition to free-trade agreements in the world is actually grounded in things outside of trade," Parker said.