Thursday, April 25, 2024

Trade pacts key in changing world: minister

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O’Connor beats drum for WTO as overarching authority.
Agriculture Minister Damien O’Connor says $200,000 will be allocated to Rural Support Trusts who know their communities and what support is required to help people through.
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Trade and Export Growth Minister Damien O’Connor continued to talk up the need to protect a rules-based international trading system at this year’s Fieldays.

When the New Zealand-European Union free trade agreement is in force, 75% of NZ’s trade will be covered by trade agreements – but the country will “ultimately” be protected by the World Trade Organisation, O’Connor said. 

“There’s a lot of tension, geopolitical tension across the globe and people are starting to use ad hoc interventions and trade for their own purposes,” he said.

O’Connor noted the United States is embarking on a decarbonisation approach that is looking to  block products coming into their country that might have a high carbon footprint, for example. 

He also pointed to the carbon border adjustment mechanism being proposed by the EU.

“These are things that are starting to creep in,” he said. 

“But the World Trade Organisation is ultimately the place that should endorse those rules. We have and will continue to fight for the relevance of that organisation.” 

His view was echoed in the latest KPMG Agribusiness Agenda, where world-class biosecurity and signing high-quality trade agreements remained the top two priorities for industry leaders and influencers. 

Ian Proudfoot, agri-food global head of agribusiness for KPMG, said much of the discussion revolved around the changing nature of international trade and concerns that NZ is overexposed to the Chinese market.

Concerns were also expressed around the new ways trading partners are introducing constraints on free trade, for instance, through the implementation of behind-the-border non-tariff barriers, including measures such as potential cross-border adjustment mechanisms to impose carbon taxes on imported products with higher footprints than local equivalents.

Against that backdrop, NZ needs to keep “battling for the WTO” and its ability to enforce the rules of trade, said O’Connor. 

“Otherwise, small and developing countries get hammered while the big elephants stomp around.”

The United Kingdom prime minister’s trade envoy, David Mundell, also stressed the importance of the rules of trade.

According to Mundell, the UK’s entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership will also help. 

The UK will add balance and value to the agreement, which otherwise could be “overwhelmed”, he said. 

“If that [the UK’s entry] wasn’t the case, others might push in the other direction,” Mundell said.

O’Connor said he’d been to three different trade events across the world in the past month or so and “they are all concerned about interruption, disruption and changing rules”.

He was upbeat, however, about NZ’s position as a trading nation.

“We have an amazing array of opportunities through our current trade agreements,” he said, adding that NZ will continue to push for others.

O’Connor mentioned the Middle East and also noted that India has been talked about which is a “big emerging market”. 

However, he underscored that NZ needs to be selective as it can feed only 40 million to 50 million people. 

“So, there are plenty of opportunities to sell a product. It needs to be at a profit and it needs to be at the top end of the market.” 

Trade was also clearly back in the limelight at Fieldays given the number of international delegations.

NZ Trade and Enterprise (NZTE) hosted a Latin American delegation and said the other two major groups were from Zimbabwe and southeast Asia, with the latter group including business leaders from Singapore, Thailand, the Philippines, Malaysia, Indonesia and Vietnam.

According to NZTE’s agritech partnerships lead, Graeme Solloway, visitors noted the connectivity across the sector, and between the sector and government, and the political representation at Fieldays emphasised the importance of agriculture to the NZ economy.

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