A new government, a renamed TPP, ongoing squabbles about Brexit, a nascent NZ/EU trade agreement and a bunch of new trade negotiations – at this time of year it’s good to look back and consider what all this change means for New Zealand trade.
Over the last year, we have posted almost 40 blog posts (37 to be exact, this is the 38th) to Tradeworks commenting on all aspects of the trade agenda seen from a New Zealand perspective. We’ve covered all manner of topics and we’ve tried to include a variety of commentators. We’re grateful to all our contributors.
One thing is clear: trade does not stand still. And trade does not take place in a vacuum either – it is impacted by economic change, changes in government policies and by changing business models. I’d like to highlight few of the main issues below – I discussed some of them on a recent Radio Live Rural Exchange segment with host Hamish McKay and guest panelists Sarah Perriam and Richard Loe. You can see the full video here. I suggest you also check out our #TradeAnswers page here where several commentators answer your questions on trade.
TPP – the name has changed, what else is different?
In case you missed it, the TPP is now the CPTPP – the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership. So what’s changed since the old agreement?
TPP was a concluded, signed trade agreement ratified by New Zealand and Japan, but never entered into force after President Trump withdrew the USA from negotiations. The remaining 11 partners have since agreed to proceed with TPP but to amend or suspend certain provisions until such a time that the US decides to come back, with this decision, of course, dependent on the approval of the remaining partners.
The new agreement builds on the old and suspends certain areas. The suspended bits are the things that were most problematic for the public to understand, such as intellectual property provisions and aspects of investment.
What hasn’t changed is the market access package – the ability to sell into other markets, an area critically important for New Zealand trade, particularly the market access achieved for meat, dairy, wine, horticultural, wood, seafood and other products into Japan.
How are we getting on with UK trade relations in the light of Brexit?
To cut a long story short, we are a long way away from negotiating a free trade agreement with Britain. Until it completes its ‘divorce’ from the European Union and we understand the future trade policies of the British government, we can’t get into serious negotiations. This could take years, even a decade, it’s hard to say.
What is clear is that we have critically important interests to preserve in both Europe and the UK. New negotiations with Europe are likely to start in the new year. My colleague Stephanie Honey has written extensively on this in our Free Thinking Blog here. As for the UK, there are some transitional issues about our sheep meat and dairy access that must be resolved. If they become “Global Britain” after they leave the European Union, it could be good for New Zealand to have a free trade environment. But it’s just not possible to see how that will take place at this point.
Will the change in New Zealand’s government impact on trade?
It’s not the first time we’ve had a change in government and, while policies do change, fortunately there are structures in place that provide for continuity, including retaining our top trade officials. On this note, I acknowledge the hard work that Prime Minister Jacinda Ardern and Trade Minister David Parker did at APEC to secure CPTPP, for which we in business are extremely grateful. We also thank former Prime Minister Bill English and former Trade Minister Todd McClay for their strong support of trade while in office.
In my pre-election blog post, I said that whatever happened on 23 September we needed the new government to listen to business and work together to explain trade to the public as well as restoring bipartisanship to trade. That remains my Christmas wish!
All of us at TradeWorks and the NZ International Business Forum wish all our readers all the best for 2018. Happy trading one and all!
This post was prepared by NZIBF Executive Director Stephen Jacobi. You can watch his recent Radio Live video here.