Another challenge for Damien O’Connor: NZ has fallen behind Aussies and the Brits in striking free trade deals with India

As  India  fulfils  its  long-held   dream of  becoming  an  economic  super-power, New Zealand  is  again  being  left  on  the  sidelines.  First Australia  and  now  the  UK  have  beaten  it  to the punch  in  securing  free  trade  deals with India, a country  in Asia with  which  New Zealanders  have  always   felt  an  affinity — and  not  just  in  cricket

As The Economist  reported   earlier  this  month,  a  vast national  market  is  being created there and  empires  are  being built  on  new  technologies.

India  is  forecast  to be  the  world’s  fastest -growing  economy in 2022. For  India  to grow at 7%  or 8% for  years  to  come  would be  “momentous”.

The Economist  cited  four  pillars that  will  support  growth in the  next  decade:  the  forging  of  a  single  national  market, an expansion  of  industry  owing to  the   renewable  energy  shift and  a  move  in  supply  chains away  from China, continued  pre-eminence  in  IT, and  a  high-tech  safety net for  the  hundreds  of  millions  left  behind  by  all  this. Continue reading “Another challenge for Damien O’Connor: NZ has fallen behind Aussies and the Brits in striking free trade deals with India”

Here’s hoping Ardern gets to meet Biden during US trade visit – and O’Connor finds time to check out gene-editing benefits

New Zealand’s  export industries are looking  to a  new  era in the  wake of life returning to something like  normal in international markets.

The  Prime Minister, Jacinda Ardern, will head a  mission to the  US to promote trade and tourism opportunities in our third largest export and visitor market, saying this is part of the Government’s reconnection strategy to support export growth and the return of tourists post COVID-19.

Ardern  is  certain  to  attract  international  attention   with  her  scheduled commencement address at the 371st Harvard University Commencement ceremony.

But the  more  crucial engagement will  be  at  the  White  House for  talks  with  President Biden,  who is now in Asia. Continue reading “Here’s hoping Ardern gets to meet Biden during US trade visit – and O’Connor finds time to check out gene-editing benefits”

Greenpeace gripes at govt’s greenhouse gas agenda but agriculture leaders welcome it (and push genetic technologies)

Despite   pouring  $2.9 billion  of  taxpayer funds  into  the  battle against  climate  change, the Ardern  government won few  plaudits  from  climate  change lobbies – and  copped a  severe  caning   from  Greenpeace for refusing to cut  dairy herds.

As  Radio  NZ  reported,

“Climate activists say the government’s landmark plan to curb emissions is light on detail, full of fluff, and lets the worst polluters off the hook”.

Government  ministers were  nevertheless ebullient   about their  package, believing  they  had  delivered a  master stroke  in  earmarking $569 million  to help low-income families get  cleaner  cars  while winning  over  farmers  with a  new  agricultural emissions centre.

Greenpeace  saw  that  rather  differently.  As  their  spokesperson put it:

“The Emissions Reduction Plan gifts $710 million to the agricultural industry – a quarter of the entire Climate Emergency Response Fund which it has not contributed towards”. Continue reading “Greenpeace gripes at govt’s greenhouse gas agenda but agriculture leaders welcome it (and push genetic technologies)”

O’Connor now will support law changes needed for Fonterra’s capital restructuring

Agriculture  Minister  Damien  O’Connor has  overcome  his objections to  the  capital restructuring of  dairy giant Fonterra  and  says  the  government  will  now  amend the Dairy Industry Restructuring Act.

The dairy giant wants to make it easier to join the company, while maintaining farmer ownership amid falling milk supply.

O’Connor  recognises  Fonterra as a key part of New Zealand’s world-leading dairy industry and a major export earner for the economy, sending product to over 130 countries.

Around 95% of all dairy milk produced in New Zealand is exported, with export revenues of  $19.1bn a year. It accounts for 35% of NZ’s total merchandise exports and around 3.1%  of GDP. The industry employs around 49,000 people. Continue reading “O’Connor now will support law changes needed for Fonterra’s capital restructuring”

O’Connor is confident the DIRA can be tweaked to give effect to farmer vote in favour of Fonterra’s capital restructuring

Farmers    have  voted overwhelmingly  in  favour  of  a  capital  restructure  for Fonterra—- and Agriculture Minister Damien O’Connor,   who   previously  raised   concerns about the  plan,  now  says  he  is  confident the  government can  work   with the  board   to  get  the change   across the  line.

Fonterra chair Peter McBride last  week  told  Fonterra’s  meeting:

“Either we’re a corporate or we’re a co-operative. The current model, where we’re trying to have a foot in each camp, is not sustainable”.

Farmer-shareholders  made  it  plain  they  wanted  the  “pure”  co-op rather  than the corporate model

Now  it is  over  to  the  board   to  negotiate  the  “tweaks”  which O’Connor  says  he  believes  are  necessary in amending the Dairy Industry Restructuring Act.

O’Connor  accepts the  vote last week is  “a very clear result”.

“I’m pleased for Fonterra. It was really important that they get a clear mandate for change and there’s an indication that the farmers are behind the board.There’s been a shift in focus for both the board and management over the last couple of years. This is an endorsement of the direction of travel.” Continue reading “O’Connor is confident the DIRA can be tweaked to give effect to farmer vote in favour of Fonterra’s capital restructuring”

Geographical Indications are among the sensitive issues for NZ in free-trade talks with EU

Trade  Minister  Damien  O’Connor  has  revived hopes  that  New Zealand  can  land  a free  trade  agreement  with the  UK  this  year  and another one subsequently  with  the  EU, following  his just- concluded  mission  to  European capitals.

Farm lobbies  had  not been  confident   when  he  set  out.  In  the case  of the  UK  we had been beaten to the punch by  Australia.

It  seemed  unlikely  NZ  could  get  anything better  than their  Australian counterparts  who  appeared willing to  accept  a  long  phaseout on duties  on,  in particular,  most farm products, including dairy.

Since then Australia  has  entered  the  AUKUS  pact,  which  particularly  riled France’s President Macron because Australia’s decision to  acquire  nuclear submarines  from the US   meant cancellation of  a  previous  (very expensive)  deal to  buy French   diesel-powered submarines.

So  one  of  the major thrusts of  O’Connor’s  mission  became advancing  free trade negotiations with the EU.

Continue reading “Geographical Indications are among the sensitive issues for NZ in free-trade talks with EU”

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”

Biden’s ratings are rocked by chaos in Kabul but the US appreciated NZ’s contribution to the evacuation

The war in Afghanistan is over after 20 years, according to a defiant speech by President Joe Biden, but the withdrawal  has left him and his administration wobbling.

Biden’s  personal poll ratings are now at 36%, down from 50% previously, while those of his vice president Kamala Harris are only 46% and she is failing to make political headway.

He faces strong domestic challenges. The House and Senate have passed two bills to fund infrastructure and a huge $US3 billion bill to fund a rang of measures from healthcare through education to social welfare.  The latter is mired in internal Democratic party struggles, largely because Biden wants to fund it largely through raising taxes from an average 23% to 28% and capital gains to 43%.

This sticks in the craws of moderate Democrats and most Republicans and is unlikely to proceed in its current form.

Later in 2022 the US will hold mid-term elections and already the parties are gearing up. The Democrats need lose only five seats in the lower house to surrender control to the Republicans (and end the career of Speaker Nancy Pelosi) while the Republicans need to gain only one seat in the Senate to control the upper house. This would leave Biden a lame duck.

On past results over 60 years, the party holding the White House also loses the lower house.

But  let’s get back to the war. Continue reading “Biden’s ratings are rocked by chaos in Kabul but the US appreciated NZ’s contribution to the evacuation”

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”