Thursday, December 7, 2023

Pressure on UK for NZ trade deal

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Britain’s mad scramble for trade deals before its departure from the European Union later this year could play into the hands of New Zealand negotiators as they embark on talks for a fairer crack at its market for our agricultural exports.
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NZ and Australia are the latest countries to start talks for a trade deal with the United Kingdom following Japan and the United States earlier this year and ongoing negotiations with the EU.  

The UK also announced it intends to join the 11-country Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) which includes NZ, Australia and Japan.

NZ negotiators will now demand the UK disown eye-wateringly high tariffs – adopted as part of its EU membership – which largely shut out dairy and beef imports from this country.

The Dairy Companies Association said the UK last year accounted for just 0.08% of NZ’s dairy exports despite it being one of the largest importers of dairy products in the world.

But results of public consultation released by the British government last week underline the uphill battle it faces to convince its farmers to learn to live without the tariffs protecting them.

“The need to balance tariff reduction, in order to promote an FTA with NZ, with the potential negative impacts on the UK’s meat and dairy sectors was a point repeatedly made,” it said.

Trade Minister David Parker accepted agricultural market access would be among the most difficult aspects to the talks – as it was with almost all of NZ’s trade negotiations.

“Having said that the UK is expressing the view that they want to be more open with the rest of the world after Brexit than before so we are hopeful.”

Former trade negotiator Charles Finny said NZ was in a much stronger negotiating position with the UK than with the EU, which was offering zero improvement after two years of talks.

“The EU has already got FTAs with the rest of the world except us.

“The UK has got none. The dynamic is totally different.”

He disapproved of the idea NZ could threaten to block the UK joining the CPTPP as leverage to get the deal it wanted.

Such a veto risked infuriating other CPTPP countries and undermining the 11-country agreement to the cost of NZ exporters in the long run.

“I would have thought we would be focusing on trying to negotiate a high-quality FTA with the UK for all the reasons they want to do the same – to send a signal to the world about what sort of economy it wants for the future and to encourage others to negotiate FTAs with the UK.”

Former High Commissioner to London and Trade Minister Lockwood Smith agreed the pressure was on UK negotiators to make the running in their talks with NZ.

The clock was ticking on the December 31 deadline British Prime Minister Boris Johnson had set for leaving the EU.

Johnson has said he will take the UK out of the EU with or without a trade deal by that date.

Smith said the closer the UK got to that deadline without trade deals with countries outside of the EU then the weaker its negotiating position for a deal with its largest trading partner would become.   

“It just puts more pressure on the EU to be sensible about how it approaches the UK if it sees the UK making rapid progress globally.

“But to do that the UK will need to do a quality agreement.

“NZ is just not going to do a low-quality agreement with the UK.”

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