''The highest tariff, coupled with our distance from the market, is challenging for a small economy.''
Fulfilling a campaign pledge US President Donald Trump signed an executive order in the Oval Office on Monday pulling the United States out of the 2015 TPP agreement and distancing the United States from its Asian allies.
Mrs Nicholls said a bilateral agreement with the US was possible but it was not easy for a country the size of New Zealand, with a strong agricultural base, to negotiate a deal with the US.
If a bilateral agreement with the US was not possible, New Zealand would be at a disadvantage with Australia which already had better trade access.
There were still opportunities with the TPP which might include implementing the existing agreement without the US, she said.
''If we can implement the existing signed agreement, along with Japan and Australia, there are tremendous opportunities for our local exporters.
''We could also negotiate a series of bilateral free trade agreements which may be more appealing to Mexico,'' Mrs Nicholls said.
Mexican President Pena Nieto said Mexico would immediately seek bilateral deals with countries in the TPP.
Chile would continue to pursue bilateral trade deals, Foreign Minister Herald Munoz told journalists.
The South American country had proposed meetings with TPP members as well as China and South Korea and had received positive reactions at a high level, Mr Munoz said at a press conference.
Australia hoped to salvage the TPP by encouraging China and other Asian nations into the agreement, its Trade Minister Steven Ciobo told the Australian Broadcasting Corporation.
Australian Prime Minister Malcolm Turnbull said he had held discussions with Japanese Prime Minister Shinzo Abe, New Zealand Prime Minister Bill English and Singaporean Prime Minister Lee Hsien Loong about the possibility of proceeding with the TPP without the United States.
''Losing the United States from the TPP is a big loss, there is no question about that,'' Mr Turnbull told reporters in Canberra yesterday.
''But we are not about to walk away ... certainly there is potential for China to join the TPP.''
New Zealand Trade Minister Todd McClay said ministers from the remaining TPP countries would meet in the next few months to discuss how to save the trade deal, which was seen in Asia as a counterbalance to China's rising influence.
Mr Abe had touted TPP as an engine of economic reform, as well as a counterweight to a rising China, which was not a TPP member.
Mr Ciobo said China and Indonesia could join in the vacuum left by the United States. The TPP had yet to come into force and many countries were still to ratify it.
''The original architecture was to enable other countries to join. Certainly, I know that Indonesia has expressed interest and there would be scope for China, if we are able to reformulate it,'' Mr Ciobo said.
The remaining 11 TPP nations are Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, Vietnam, Australia and New Zealand.
Mr McClay said in a statement he had talked with a some TPP-member ministers when he attended the World Economic Forum in Davos last week and he expected they would meet over the coming months to ''consider how to move forward.''
''The agreement still has value as a FTA [Free Trade Agreement] with the other countries involved,'' he said.
