Brexit – going viral but not pandemic

For pundits, Brexit is the gift that keeps on giving.  For the countries of Europe, a measure of how relationships are evolving.

The latest quinella is running on both flanks of the European Union, with the first leg on the green turf of Northern Ireland.

Continue reading “Brexit – going viral but not pandemic”

Our trade minister is hard at work in the quest for more FTAs – but several factors are frustrating his efforts

The government’s trade policy is running into quicksand. Reports from London and European capitals indicate there is little chance of immediate progress with free trade agreement negotiations with the UK or the European Union.

Don’t blame trade minister Damien O’Connor, a genial fellow who has generated much enthusiastic support from embassies around the world for his willingness to travel and engage with his counterparts.  Likewise, with MFAT trade supremo Vangelis Vitalis, highly regarded around the world for his trade craft.

On the other hand, there is a growing mood of desperation in the business world and other sectors at the reluctance of ministers, from the PM downwards, to travel offshore.  The PM delivered her annual address to the UN General Assembly by video.

Observers say whatever message she conveyed was simply lost in the electronic blizzard. Nothing replaces a personal appearance.

Prospects are firming for the first overseas trip by the minister of foreign Affairs, Nanaia Mahuta, principally to Doha where she will lead a troupe of singers and dancers to perform at the New Zealand pavilion of the delayed world trade expo. All have been guaranteed MIQ spots on return home as they are “representing New Zealand”.

Put the lack of movement on the trade-policy front down to several factors.

First, the state of politics in both the UK and the EU. Capitals have been hit hard by the Covid-19 pandemic and economies are only now beginning to recover.

There is alarm in the EU at the return of inflation. Prices, led by gas and electricity, are surging.  While France is likely to support an FTA with NZ, other support can be counted on the fingers of one hand.

London is looking to import turkeys from Poland and France for the Christmas trade because UK farmers had to curb production because of labour shortages. The Johnson government has been forced to reverse its policy of limiting 5,500 emergency work visas for the poultry industry to the turkey sector.

Visas will be available to any poultry workers after poultry producers, which previously relied on labour from eastern Europe, warned of threats to Christmas and potential overcrowding on chicken farms because of a lack of workers.

Britain is facing a series of crises ahead of Christmas. A shortage of heavy-vehicle drivers has led to the army delivering petrol.

Gas is short because of low stockpiles and a summer of lighter than forecast winds reduced wind-generated power supplies. Across the EU energy supplies are reaching crisis point as Russia appears reluctant to provide more than contracted gas supplies.

Second, the UK and EU have no appetite for new trade pacts, fearing a political backlash from electorates wearied by Covid.  As we have already noted, the UK-NZ FTA was driven in London by Liz Truss, now the UK foreign secretary.  Now there is a different mood in the British capital where the Johnson government has been badly bruised by farmer reaction, especially in traditional Conservative-voting electorates, to the UK-Australian FTA.

In recent decades, NZ prime ministers have always declared, amidst crises and dramas, that “this is not a good time to be in government”. Trade minister O’Connor may well say the same.

Free trade agreements: why NZ might look again at trying to join the USMCA

Britain, like New Zealand, is having a hard time even focusing the US Government on a free trade agreement. Rather, NZ is going the way of encouraging President Joe Biden’s administration to reconsider joining the Comprehensive and Progressive Transpacific Partnership.

We believe a NZ-US free trade agreement was barely mentioned during trade minister Damien O’Conner’s Washington DC meeting with US Trade Representative Katherine Tai and others.

Issues such as the USA’s position on the World Trade Organisation were higher on his agenda.

Ahead of the presidential elections last year, Biden made clear his lack of enthusiasm for free trade, mainly at the behest of American trade unions which provided massive financial and “get out the vote” support. Only 6.1% of the US private work force is unionised. Continue reading “Free trade agreements: why NZ might look again at trying to join the USMCA”

A NZ-UK trade agreement will be another – albeit small – step in the re-ordering of global trade

There is increasing chatter in London that the NZ-UK trade deal will be announced in days, with invitations to briefings being diaried for Tuesday.

But it’s worth noting that the UK commentators seem to be excising the prefix ‘free’ from the ‘trade agreement’, perhaps reflecting better understanding that these days there is no free trade without a substantial regulatory component.

While NZ’s producers will no doubt be grateful if they get an Australian-style phased reduction of tariffs and quotas as has been briefed, the non-tariff/quota regulatory barriers will be just as important in the long run.

That at least would seem to be the view of the eminent organ, the Irish Farmers Journal, in its assessment of the currently-fraught implementation of free trade arrangements between the EU, Ireland, Northern Ireland and Great Britain (ie, the UK minus Northern Ireland).

Continue reading “A NZ-UK trade agreement will be another – albeit small – step in the re-ordering of global trade”

Why farmers will be hoping for a better FTA agreement with the Brits than the Aussies secured

Reports  this  week  indicate that  New Zealand is  getting  closer  to a  free  trade  deal  with  the  UK.  Trade Minister  Damien O’Connor says  NZ’s negotiators  have been working around the clock to reach the shared objective of an FTA agreement in principle by the end of August.

The problem, as  Point of Order understands it,  is that  NZ has  been  offered  the  same arrangements as  Australia  on  agricultural products,  with  a  phase-out  of  tariffs  over  11  years.

As  NZ trade  expert  Stephen Jacobi argues:

“It would be absolutely ridiculous if we were to enter into an FTA with the UK that did not put forward the prospect of free trade, zero tariffs in lamb and beef and dairy within a reasonable timeframe.”

Britain’s Trade Secretary, Liz Truss, says teams are working around the clock to get the deal done in the coming weeks.

“We are both big fans of each other’s high-quality products, so this could be a huge boost that allows British shoppers to enjoy lower prices and British exports to be even more competitive,” she said.

“NZ and the UK are natural partners united by modern values. An agreement would reflect those ideals and is a win-win for both countries.” Continue reading “Why farmers will be hoping for a better FTA agreement with the Brits than the Aussies secured”

At last, our foreign affairs minister will venture overseas – she’s got a ticket to Dubai to promote indigenous and tribal economies

Excitement is mounting in the Beehive.  Foreign minister Nanaia Mahuta is contemplating her first overseas visit.

Not, we might think, to Australia or the Pacific Islands.  No, this is further afield, to Dubai, no less, for Expo 2020 in November.

Not much chance to hold bilateral chats with other foreign ministers there but a chance to display substantial Maori content at the New Zealand Pavilion.  

The minister is quoted in an enthusiastic release from trade officials: Continue reading “At last, our foreign affairs minister will venture overseas – she’s got a ticket to Dubai to promote indigenous and tribal economies”

UK-NZ free trade agreement looks likely to replicate Aussie deal, although Brits will be driving a hard bargain

With trade minister Damien O’Connor due in the northern hemisphere in September, London’s Daily Telegraph reports a free trade agreement between the UK and NZ is close.

Citing sources in the UK Department of international Trade, the newspaper says hopes are growing that a deal can be secured “within weeks.”  An announcement on New Zealand before the end of August is “highly possible” as discussions intensify.

 Australia’s agreement with the UK was settled in June.  The UK Government hopes to get it signed off by Boris Johnson and his counterpart Scott Morrison when the latter visits Britain in October for the Cop26 climate conference.

The Daily Telegraph’s source said trade secretary Liz Truss would be driving a hard bargain on key areas of interest.

“New Zealand will need to give us more on services, mobility and investment if they want a deal. If we have to go beyond then into September to get the best deal, then so be it.”

Any agreement  is likely to take a similar shape to Australia’s, which proposes a widespread liberalisation including staged removals of tariff quotas on agricultural exports which has drawn criticism from British farmers.

The Telegraph says the NZ FTA is expected to have a negligible effect on the UK’s GDP, with modelling by the trade department even indicating that an extensive deal could mildly reduce Britain’s national output.

Recent events have provided a potentially awkward backdrop for what may be the final weeks of talks.  Amazon last week announced that it would shift production of its highly anticipated Lord of the Rings TV series from New Zealand to the UK, in a major blow to the country’s creative and tourism industries, the paper said.

There’s no escape from climate change – and NZ should brace for the tariffs imposed by our trading partners to deal with it

When a magazine as authoritative as The Economist  heads   up   its  lead  “No Safe Place” ,   even  climate  change  deniers  should  sit  up  and  take  notice.

The  Economist”  says  the  most terrible  thing   about the  spectacular scenes of  destruction that  have played out  around  the  world  over recent  weeks  is  that there  is  no  safe place  from  which  to  observe  them.

“The  ground under the German  town of Erftstadt is torn apart like tissue paper by flood  waters; Lytton in British Columbia  is  burned  from the map just a  day after setting  a freakishly  high temperature record; cars  float  like  dead fish  through the streets-turned-canals in  the Chinese  city  of Zhengzhou. All  the  world  feels  at risk,  and  most  of  it  is”.

NZ   had  its  own   headline:  “The  Buller River  recorded  largest NZ  flood  flows in  almost 100  years”.

The  Economist argues  the  extremes of  flood  and fire  are  not  going  away  but  adaptation can  lessen  their  impact.

Greenhouse gas  emissions have produced  a  planet  more  than 1 degree  warmer  than  in  pre-industrial  days. Continue reading “There’s no escape from climate change – and NZ should brace for the tariffs imposed by our trading partners to deal with it”

Has ‘Johnsonism’ arrived?

Britain’s new health minister, Sajid Javid, says he will keep wearing a mask after formal restrictions are removed in the next fortnight.  It’s a more political than public health gesture.  Unless perhaps he’s meeting unvaccinated ministerial visitors from Australia or New Zealand.

Britain’s Covid debate is morphing faster than the virus.  Thanks to the fast spreading Delta variant and a super-charged vaccination programme it’s plausible that pretty much everyone bar Scottish lighthouse keepers will have had Covid antibodies delivered to them by the end of the year via neighbours or needle. 

Continue reading “Has ‘Johnsonism’ arrived?”

O’Connor (like the Black Caps) will deserve a victory parade if he can secure a trade deal with the UK that outscores Australia’s

The  government  has  been  beating  the drum on the  prospects  for  a  free  trade  deal with the United Kingdom, which it claims  is part  of the wider work  it is undertaking to support New Zealand’s economic recovery from Covid-19.

Following  Trade Minister Damien O’Connor’s sessions  with UK Trade Secretary Truss in London to push along the bilateral negotiation, officials’ teams will spend the coming weeks finalising FTA details with the aim of reaching agreement in principle in August.

Foreign Minister Nanaia Mahuta told Parliament NZ  is working to achieve a high quality comprehensive trade deal.

“Our priority is a deal that delivers benefits for all New Zealanders. That includes seeking elimination on all tariffs over commercially meaningful time frames, and that takes account of our ambition across the agricultural sector”. Continue reading “O’Connor (like the Black Caps) will deserve a victory parade if he can secure a trade deal with the UK that outscores Australia’s”