Two former trade ministers have joined the dairy industry in condemning comments made by Prime Minister Jacinda Ardern at a critical point in trade talks with the European Union.
The Dairy Companies Association believes Ardern scuppered the industry’s last chance of a commercially meaningful outcome from the talks by revealing a weakening in New Zealand’s negotiating position.
Before flying to Brussels for the final few days of the talks last month Ardern told media that NZ was ready to accept an improvement on the “status quo” market access NZ exporters already had in the EU.
Around that time Cabinet had signed off on a change in the mandate given to NZ’s trade negotiators from a commercially meaningful deal for key pastoral exports to the lower threshold of an improvement on the status quo market access.
DCANZ has likened the PM’s comments to someone selling their house telling the buyer the lowest possible price they were willing to sell it for before negotiations had begun.
Former National Party Trade and Agriculture Minister Lockwood Smith agreed with DCANZ that Ardern’s comments would have been seized upon by EU negotiators.
“Putting it diplomatically those comments would have been extremely unhelpful.”
Smith said he had not spoken to NZ’s negotiators since the deal was concluded but expected they would have been “horrified” at how the final stages played out.
He said NZ had ended up with the worst deal for its key agricultural exports that he could remember.
“The status quo for the dairy trade was impossible because of the high in-quota tariff and the beef quota was miniscule.
“Improvement on those was meaningless.
“And that is why commercially meaningful access was so important.”
Commercially meaningful access to a market has previously been defined during global trade talks as 5% of a country’s domestic consumption. In the case of EU beef consumption that equates to 225,000 tonnes. NZ’s FTA secured just 10,000 tonnes of new beef quota.
National’s current trade spokesman Todd McClay, who as Trade Minister got agreement from the EU to start negotiations for an FTA, believes the PM’s comments “pulled the rug from underneath the feet” of NZ’s trade negotiators at a critical stage of the talks.
“Either she didn’t realise the Europeans would be paying attention to what she said as they were still negotiating in Brussels or she was sending them a signal.
“Either way it is concerning for dairy farmers and the beef sector.
“I would have thought from the lowest level of negotiator to the highest political operative they would have said the PM of NZ is coming to Brussels, she has signalled she is willing to do a deal without any real gains for beef and dairy, so let’s not give her any.”
Former trade negotiator Charles Finny said it was routine for both sides in trade talks to carefully sift comments by key players for clues to shifts in the other side’s negotiating positions.
“It is very true that the EU side would have studied every word [Trade Minister Damien] O’Connor and Ardern said in advance and during the trip to Brussels.”
Finny said he thought it was unlikely Ardern’s comments had cost beef and dairy commercially meaningful access given the strong opposition to such a concession within the EU meant it was unlikely to have been agreed to anyway.
But that was not to say there might not have been a better outcome for NZ’s key exporters had the PM not slipped up.
“The comments probably indicated to the EU that there had possibly been a change in NZ’s position and that they may be did not need to dig as deeply as they thought they might have to on market access,” Finny said.