Brexit opportunity: just don’t call it another free trade agreement

LONDON CORRESPONDENT: Does New Zealand’s government understand the opportunity which Brexit presents? Are they and their advisers working tirelessly to realise it?

OK, difficult questions, not least because there are no binding decisions on the shape or timing of Brexit and these are likely to come in a final rush. But the underlying position is so positive that it would be a tremendous shame if New Zealand’s policy was not being shaped to take advantage of it.

Given the scorn critics are pouring on Britain’s post-Brexit trade prospects, the UK really needs an eye-catching trade deal to kick in on leaving. It would be a political coup, more than an economic one. The partner which Britain’s politicians think will deliver this reliably and quickly should get the most attention and the best terms.

New Zealand has many qualifications as Britain’s best candidate. Opening the borders to New Zealand agricultural products would put downward pressure on household prices for UK consumers while simultaneously threatening one of the EU’s largest markets for its most sensitive products.

This would help give the lie to the mooted shortage of dairy products. There would be squealing from UK agribusinesses tied into EU supply chains, chorused by farmers, but the government might think this was one of its more manageable problems.

A New Zealand deal would also be lower risk for the UK than many other options. New Zealand is a small, distant and culturally-similar country, specialising in a narrow range of products and services.

A sweeping deal sends a fine signal while offending perhaps the smallest number of interest groups, with the least risk of unexpected consequences. Think for a moment of the risks in betting on a deal with President Trump.

Moreover, a good deal for Britain ought to be a great deal for New Zealand.

More access for UK products is a bonus for NZ consumers. A small chunk of the large UK market would be significant for NZ producers.

The biggest payoff would come if it was an entree to a process of UK agricultural market opening – something very much in Britain’s long-term interest. It would provide unbuyable profile and branding for New Zealand product. (The days are past when Brits nostalgically bought Anchor butter – now owned by Arla, the Danish cooperative – in memory of shared wartime sacrifice and the relationship actually mattered to the British government. Your correspondent once asked one of the men at the heart of Britain’s entry into the EU about New Zealand’s role and was told, in effect, ‘You could have stopped it. Many MPs just wouldn’t support it unless New Zealand was content’.)

New Zealand’s small size is a particular advantage, letting its politicians and officials respond quickly and flexibly, valuable attributes given the crisis-level pressures hanging over their UK counterparts.

These pressures should also facilitate New Zealand creativity. With the British government hungry for a newsworthy and profitable opening to the world (ideally with negative displacements small and late), New Zealand’s officials can look well beyond the customary definitions of trade to point out the benefits of including areas like the flow of skilled labour, establishment of businesses, temporary residence, easier recognition of educational qualifications and product standards, and social security reciprocity. Seeds of innovation planted now could flourish in a post-Brexit environment.

Given the confusion in the UK, nothing will be easy, least of all getting decisions. Little imagination is being displayed. So coming up with a distinctive name which projects the nature of this new beast is an early task.

It feels more like a commercial compact or a commerce and enterprise association perhaps, rather than yet another (non) free trade agreement. After that, the NZ politician might think about how to signal the opportunity – enthusiastically, repeatedly and in the simplest terms – to his or her opposite number.

Officials will have to deal with busy counterparts who still operate on the assumption that the British civil service is the envy of the world and have difficulty dealing with a proposition until satisfied that they thought of it first. Otherwise, good luck.

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