Why NZ wants Europe in a coalition of the willing traders
Newsroom - 11 April 2025
Why NZ wants Europe in a coalition of the willing traders
By Sam Sachdeva
It originated under Helen Clark, was negotiated under John Key, and signed under Jacinda Ardern – but could the CPTPP trade deal end up as one of Christopher Luxon’s key foreign policies?
As nations scramble for a response to United States President Donald Trump’s tariffs, the Prime Minister has seized on the possibilities presented by the 12-nation trade deal – specifically, linking the Indo-Pacific nations who make up most of its membership to the economic and regulatory might of the European Union.
In a speech to the Wellington Chamber of Commerce on Thursday, Luxon said the Government would “work with like-minded countries to promote free trade as a path to prosperity and explore the role of the CPTPP in strengthening that vision”.
“One possibility is that members of the CPTPP and the European Union work together to champion rules-based trade and make specific commitments on how that support plays out in practice,” he said, mentioning “action to prevent restrictions on exports and efforts to ensure any retaliation is consistent with existing rules”.
The Prime Minister followed up his remarks with a series of calls to international counterparts, including the leaders of Malaysia, Vietnam and Singapore, in which he said he would be “testing what we can do together to buttress the rules-based trading system”.
The idea of stronger linkages between the EU nations and the CPTPP’s members has been floating around for several years, but has assumed greater importance as a result of Trump’s tariff war.
Former EU trade negotiator Ignacio García Bercero earlier this month suggested the EU form a coalition with CPTPP members to head a response to the tariffs, working together on World Trade Organisation reform, reaffirmation of the organisation’s principles, and a joint dispute settlement case against the US.
Nor is Luxon the first New Zealand politician to propose greater cooperation between the EU and the CPTPP.
In a speech late last month, Labour Party foreign affairs spokesperson David Parker said membership in the trade deal could be “a sensible choice for Europe” given problems with the US, noting the UK was already a member.
Parker, who served as trade minister in the first term of Dame Jacinda Ardern’s government, told Newsroom he had in fact “fed [the idea] into the Government” through Foreign Minister Winston Peters’ office before raising it in his own speech.
“I came back with that idea from Europe, having met with some of my very senior trade contacts there, who are former politicians who I knew would be freed of political constraint and therefore more open with me.”
With the World Trade Organisation unable to make substantial progress on most issues, the CPTPP could become a de facto replacement given its enforcement mechanisms and strong standards.
Former diplomat and trade adviser Stephen Jacobi told Newsroom he was in full support of expanding the CPTPP to China, Taiwan, Indonesia and others, but EU membership would be “more complicated”.
“[I’m] certainly not ruling out the idea but the EU’s model of economic management is quite different from that envisaged in CPTPP,” Jacobi said.
“That said, the times are such that we need to explore all options and CPTPP definitely needs to be supercharged!”
Among European backers of the idea is former EU trade commissioner Cecilia Malmström, who in 2022 described membership as an opportunity to strengthen its trade agenda and become a “stronger geopolitical actor”.
“The European Union and the Indo-Pacific have a lot to gain by deepening their cooperation. Doing so would truly constitute friendshoring with friends.”
In an email to Newsroom, Malmström said she had been “fully in favour [for] several years now”, and the case for EU membership had only grown stronger in the wake of Trump’s tariffs.
“In a world of trade chaos we need to stick with our friends and allies and they are all in the CPTPP. That is where future rules and standards will be set and we should participate.”
Not everyone is enthusiastic about the idea of full EU membership, however.
In 2023, UK-based trade expert David Henig said the argument for accession “does not really hold up”, citing concerns about the potential impact on manufacturing jobs in Europe as well as the fact the deal was “not at the cutting edge of trade policy” and unlikely to evolve.
But responding to questions from Newsroom, Henig said the EU formally joining the CPTPP was different to the blocs “working together as a kind of coalition of the willing” to stand up for fair trade rules.
“Indeed, I’m quite surprised that this hasn’t happened in the last week … part of the problem seems to be that while lots of folk think it is a good idea, no country appears to have yet set out a vision and convened trade ministers accordingly.”
Luxon’s speech, and his subsequent calls to world leaders, appeared an attempt to set out that vision and have New Zealand take on a convening role.
That plan could yet run into domestic hurdles: when Peters was asked about the remarks, the foreign minister said it was “all very premature”.
“We’re trying to sort out this other thing with America and China’s trade war, and we’re rushing off the solutions – let’s find out what happened there first.”
There have also been problems in agreeing on new CPTPP members. While the United Kingdom joined the trade pact in December last year, geopolitical tensions and quality concerns have so far stymied China’s bid for membership, while other smaller nations appear stuck in the queue.
Parker expressed optimism the current state of the trading order could expedite matters: “Surely there would be a little bit less rigidity around some of these things given what’s happening elsewhere in the world.”
There would also be the matter of navigating the EU’s own byzantine ratification processes, with specific approval required from each of its 27 member nations for investment protocols, while it’s also unclear whether the bloc would be willing to meet all the market access requirements required of CPTPP members.
Luxon suggested formal membership might not be a necessity for closer ties, and given the current state of the world, any form of cooperation may be better than none.
As Henig put it: “This really has to happen if the world trade system isn’t to decline further in the next few years.”
