New Zealand never stood a chance of getting a good deal for farmers in the Trans-Pacific Partnership, Winston Peters says.
Negotiations in the secretive global trade deal, which covers 40 percent of the world's economic value, stalled in Hawaii yesterday with trade ministers admitting dairy had become a sticking point.
Trade Minister Tim Groser said dairy was always one of the last issues to be resolved in trade negotiations, but he was optimistic New Zealand would get a good deal when talks resume.
"This is about getting the best possible deal for New Zealand, not a deal at any cost," he said.
But NZ First leader Peters said Mr Groser should have known he stood no chance against the "protectionism of US, Canadian and Japanese farmers".
"There was never going to be any leeway for New Zealand, but Mr Key and Trade Minister Tim Groser kept working to accommodate their new buddies, the US," Mr Peters said.
He called for the government to drop the TPP entirely and focus on negotiations with "like-minded countries that are prepared to open up to fair trade arrangements".
But Mr Groser said yesterday New Zealand was still committed to eventually signing the deal, which has been in the works since 2008.
The agreement has been controversial in New Zealand because of fears it may raise the price of medication for national drug-buying agency Pharmac and could lead to companies being able to sue governments for changing laws.
But the government has argued the economic gains from access to agricultural markets would make it a net benefit.
Dairy makes up about 20 percent of New Zealand's exports but faces large tariffs in many countries.
"The Prime Minister must explain why he did a disservice to New Zealanders by talking up billion-dollar gains from the Trans-Pacific Partnership Agreement to the New Zealand public," Mr Peters said.
The most recent round of negotiations was seen as vital to keeping the trade deal out of US presidential election campaigning, as candidates from both sides of the political spectrum are nervous about the agreement.