At the current APEC summit in Japan New Zealand has become the first country to commence negotiations towards a free trade deal with Russia. Remember on 7th April 2008 New Zealand became the first OECD country to sign a free trade deal with China which has seen two-way trade nearly double since it came into force.
At the same summit the U.S.-backed Trans-Pacific Strategic Economic Partnership (TPP), has Japanese farmers scared that cheap farm products from overseas will overwhelm their highly protected markets. TPP originally set up in 2006 by New Zealand, Singapore, Chile, Brunei.
As Japanese Prime Minister Naoto Kan will seek to accelerate its efforts to reduce trade barriers in the Asia Pacific region, he faces resistence from the agricultural sector who have been protected from exports by huge tariffs –Japan places a 360% tariff on imported butter and a 778% tariff on imported rice.
But John Key has made it clear to the Japanese that if they do not want agriculture to be on the table during talks on a regional free trade agreement then New Zealand did not want them at the table. Furthermore, New Zealand is concerned that Japan’s inclusion in TPP will lead to compromises, particularly when concerned with agricultural products.