Whatever trade gains are made in NZ-UK trade talks, we should brace to share them with Australia and the US

Trade Minister David Parker is gung-ho about getting a trade deal with the UK sewn up. He says NZ and the UK have strong trade and economic ties.

“NZ is pleased to be among the first countries to negotiate a trade agreement with one of our oldest friends”.

With a New Zealander, Crawford Falconer, in charge of the UK trade negotiating team, Parker, like the rest of the country, will be hoping for a favourable deal.

But as the UK is getting to grips with what NZ is seeking, it is also locked in negotiations with Australia and – moreover – is looking to seal trade deals with the US and Japan.  In that context, the negotiation with NZ may seem only a footnote.

For NZ, the difficulty may be that if it gets a deal done first with concessions from the UK, particularly on dairy and meat, then the UK may feel obliged to offer the same terms to Australia, and perhaps even the US.

The same day Parker was announcing the trade talks between NZ and the UK are to kick off,  Aussie Trade Minister Simon Birmingham, in Canberra, was telling Australians he was seeking an FTA with the UK and was aiming to “open up new doors for our farmers, businesses and investors”.

Birmingham said Australia and the UK hoped to conclude the deal “as quickly as possible” – possibly by the end of this year, although he conceded that may be an ambitious timeframe.

Both sides wanted

“ … an ambitious and comprehensive agreement that builds on our already significant people-to-people links and creates new opportunities for exporters, generating more jobs in our nations.

“As both our nations begin to shift our focus towards the economic recovery from Covid-19, a UK-Australia FTA will help to expand choices and export opportunities and secure stronger supply chains to better withstand future shocks”.

So NZ trade lobby groups will be hoping the two countries can co-operate, rather than compete, while getting deals done with the UK.

The UK is New Zealand’s sixth largest trading partner, with two-way trade totalling almost NZ$6bn last year.  China, Australia and the EU are top of our trade-partner list.

Parker said talks would focus on the removal of trade tariffs, new approaches to non-tariff barriers, streamlined customs, regulatory cooperation, development of digital trade and trade provisions in support of sustainable development – including climate change.

According to MFAT, modelling estimates a free trade deal could raise NZ’s GDP by close to $1bn (after it has been in place for 15 years), suggesting NZ’s exports to the UK could grow by 40%, while UK exports could increase by 7.3%.

In seeking tariff-free trade, NZ will be pressing the UK to eliminate the 8% tariff on kiwifruit which is a leftover from the pre-Brexit era with the EU. It also wants manuka honey to be tariff-free.

Given the EU in its negotiations with NZ on an FTA has offered what NZ lobby groups say is “insultingly low” market access for key products, it is vital NZ gets better terms from the UK.

But if the NZ dairy industry thinks it will be able to return to the days when British consumers eagerly sought its butter and cheese, they may be in for a rude shock.

Almost certainly Britain would have to offer the same terms to Australian and the US.