Prime Minster John Key insists that on balance, Kiwis will benefit from signing up to TPP.

The Trans Pacific Partnership trade deal could allow foreign entities to buy large assets without Crown approval, Prime Minister John Key has signalled.

Key was asked on Monday whether the TPP agreement, the proposed Pacific Rim trade deal being negotiated between 12 countries, would make it easier for buyers to acquire large land holdings in New Zealand.

He said negotiations were ongoing so he could not give a definitive answer, but he signalled that the matter under consideration was not "sensitive land" which includes farmland, but the size of other investments which would trigger an approval process.

"The question is not so much about sensitive land, I think, from memory, I'm pretty sure it's about whether it triggers the threshold, and how much that increases."

Currently those who are not citizens or do not normally reside in New Zealand need Overseas Investment Office approval if they are buying large assets, classified as those costing more than $100 million.

Residents of some countries, including Australia, have a higher threshold because of clauses in free trade agreements.

Last week Labour announced a series of "non-negotiable" conditions before it would support the TPP, including New Zealand maintaining the right to restrict the sales of farmland and housing to non-resident foreigners.

Key described Labour's position as "crazy" and "schizophrenic", claiming that if it wanted to restrict sales to foreigners it should not have included a "most favoured nation" clause in the China free trade agreement.

"[Labour leader] Andrew Little's desperate to find a way to keep the left flank of his caucus in check," Key said.

While negotiations were still continuing, Key said he believed that overall New Zealand would benefit from signing the TPP.

"I'm pretty darn confident that on the balance of benefits New Zealand is going to do a lot better if they sign a free trade agreement with the United States than if they don't."