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NZ’s new government likely to review TPP pact

WELLINGTON — New Zealand wants to renegotiate the Trans-Pacific Partnership (TPP) trade agreement under a new government that takes office next week.

New Zealand’s Labour party leader Jacinda Ardern speaks to the media after her first caucus meeting as Prime Minister-elect. The new incoming government under Ms Ardern wants to renegotiate the Trans-Pacific Partnership (TPP) trade agreement. Photo: AFP

New Zealand’s Labour party leader Jacinda Ardern speaks to the media after her first caucus meeting as Prime Minister-elect. The new incoming government under Ms Ardern wants to renegotiate the Trans-Pacific Partnership (TPP) trade agreement. Photo: AFP

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WELLINGTON — New Zealand wants to renegotiate the Trans-Pacific Partnership (TPP) trade agreement under a new government that takes office next week.

After nine years of conservative rule, liberal Jacinda Ardern was confirmed as the nation’s next prime minister on Thursday (Oct 19) after winning the support of nationalist New Zealand First party and the Green party after a close September election.

The tie-up between Ms Ardern’s Labour Party and nationalist New Zealand First represents an abrupt shift in the country’s formerly open door policy that fuelled strong economic growth but has also been blamed for soaring house prices and growing inequality.

Ms Ardern said her centre-left government will seek to renegotiate the TPP which had been strongly supported by the previous National-led government.

Labour had all along been critical of the TPP, saying that the pact would prevent the government from limiting foreign ownership of existing homes.

“The TPP has been quite a divisive issue in New Zealand and Labour will focus on renegotiating aspects related to foreign ownership of housing and land, as well as investor dispute mechanisms,” Mr Bronwyn Hayward, head of politics at the University of Canterbury was quoted by Financial Times as saying.

However, there are worries that any renegotiation of the TPP could delay it or result in New Zealand pulling out.

After President Donald Trump withdrew the United States from the trade agreement early this year, Japan and New Zealand pushed for the revival of the pact.

“At this time of international uncertainty, it’s more important than ever for outward-looking trading countries like New Zealand and Japan to state their principles clearly,” outgoing New Zealand Prime Minister Bill English said in May.

The remaining signatories have met several times, including in Australia last month, to discuss ways to salvage the deal. The 11 countries, which include Singapore, Canada and Mexico, have a combined gross domestic product of US$12.4 trillion (S$16.8 trillion).

Ms Ardern’s government will also focus on tackling a shortage of affordable housing, delivering public services and protecting the environment.

Labour and New Zealand First campaigned on similar housing policy platforms that included banning foreign investors buying New Zealand homes, introducing measures to dissuade people from quickly buying and selling properties, and increasing housing stock.

Analysts have said the housing ban that both parties advocate would only have a minimal impact on the housing market, given that foreigners own a small percentage of homes in New Zealand, though the numbers are highly contested.

Still, Ms Arden made it clear she intends to stick with a promised restrictions on foreign ownership of houses.

“At this stage what we know is that the new government has indicated that they will ban foreign purchase of existing houses. Whether there are further restrictions beyond that, there is a lot of uncertainty,” said Ms Christina Leung, principal economist at the New Zealand Institute of Economic Research.

“But I would say that at the moment, it’s more the uncertainty itself over what new protectionist measures will be put in place which would weigh on demand for housing.” AGENCIES

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