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.