Sunday, December 3, 2023

‘Golden weather’ for NZ trade policy over, Vitalis says

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NZ must start thinking in terms of economic coalitions as US’s ‘firm and clear leadership’ dims.
Vangelis Vitalis says the challenges are real and NZ needs to think about how best to manage and mitigate the risks.
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The “golden weather” for New Zealand’s trade policy is over, one of the country’s top negotiators says.

But, even though things are going to get harder, Vangelis Vitalis said he is optimistic NZ has the right strategy to “manage and mitigate the turbulence and challenges out there”.

Vitalis, deputy secretary and chief negotiator at the Ministry of Foreign Affairs and Trade, made the comments at the Red Meat Sector Conference in Auckland.

He has been the chief negotiator on multiple free trade agreements (FTAs), including the NZ/European Union deal, Comprehensive and Progressive Agreement for Trans-Pacific Partnership and ASEAN-Australia-New Zealand FTA. 

He was also a member of the negotiating teams for the NZ/China FTA and the Trans-Pacific Strategic Economic Partnership or P4 agreement.

Vitalis told the conference the “golden weather” started in 1995 with the establishment of the World Trade Organisation, which saw agriculture brought into the international rules-based trading systems. 

That meant NZ could take other countries to court for not fulfilling their obligations. 

“The rules worked.”

Another two components of the golden weather was that protectionism would decline – instead it is back up and rising – and the belief that trade is a good thing in NZ, providing “prosperity, productivity, employment and incomes”.

“That was the golden weather. The golden weather is now over.”

Vitalis said the rules NZ depended on at the WTO are no longer fit for purpose.

“We can still take cases, but their foreseeability now is really in question because you can no longer hear appeals to the case.” 

Vitalis said geopolitics is back in a way “that we have not experienced previously”, particularly between China and the United States, which is “intense and difficult”.

“Don’t get caught in the crossfire,” he said.

“If you’re in any doubt about how challenging and bruising this can get, just ask Australian wine exporters, just ask Australia barley exporters, just ask Australia coal exporters.”

As recently as the weekend, Australia withdrew its action against China at the WTO after it dropped tariffs on Australian barley that had been in place for three years.

Australia is, however, still pursuing its action on wine tariffs.

Vitalis said the challenges out there are real and NZ is going to need to think about how it manages and mitigates those risks.

NZ has relied on US leadership in trade policy for big achievements, such as the Uruguay Round, but it is no longer in that space.

“We are having to reorientate the way we think about international trade policy in the absence of that firm and clear leadership that constructed the system on which we depend on significantly today.”

Vitalis said NZ will have to be more creative and start thinking about how the country can work in coalition groups of economies to break down barriers.

Conditions will be getting harder, Vitalis said, but he is confident the red meat sector has the resilience to get through it.

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