Wednesday, May 22, 2024

Still fighting for free trade

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The Government recognises the importance of the primary sector’s exports and the heavy economic lifting it will do in coming years. Key politicians discuss the role of primary sector exports in the latest instalment of Growing our Recovery.
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Prime Minister Jacinda Ardern will not reallocate portfolios to free David Parker to focus on trade.

As the economy grapples with the impact of covid-19 and the demise of tourism, attention is focused on primary sector exports, which will carry a disproportionate economic load in the next few years.

Given the added importance of exports and World Trade Organisation forecasts of a 13% to 32% fall in global goods trade this year, Farmers Weekly asked Ardern if tenth-ranked Cabinet Minister Parker would be relieved of his attorney-general, environment and associate finance roles to focus on trade.

Ardern says she is confident and comfortable Parker can manage his workload and priorities.

In a written response to questions Ardern acknowledged the primary sector’s role to the economy.

“Our primary sector has shown through covid-19 how vital they are to our economy and the important role they play in producing high-quality food for New Zealanders and the world.”

Parker says any decision on changes to his Cabinet roles is up to Ardern.

He says countries are already adopting trade distorting measures as their Governments implement protectionist policies in response to the economic impact of covid-19.

New Zealand’s response has been to work with countries to keep supply chains moving and trade flowing and to push back against protectionism, but those measures will be ongoing.

“We will need to continue to work hard to ensure any emergency measures put in place by our trading partners to respond to covid-19 are proportionate, transparent and temporary, do not create unnecessary barriers to trade or disruption to global supply chains and are consistent with World Trade Organisation rules.”

Parker expects NZ exports to fare better than WTO forecasts.

“Agriculture and processed food are expected to fare slightly better than products with more complex supply chains, possibly putting us in a more favourable position than countries exporting complex manufactured goods,” Parker says.

From February 1 to April 22 primary sector exports were worth $8.17 billion, slightly lower than 2019 ($8.69b) but higher than 2018 ($7.4b).

He says the primary sector is playing a key role in NZ’s response to covid-19 and our international standing is being enhanced by our reputation for producing high-quality and safe food, our environmental credentials and commitment to maintaining free and open trade.

That reputation will put NZ in a strong position to continue growing the value of primary sector exports, especially while disruption to food production and trade are driving global food security concerns. 

Parker says NZ has led initiatives to keep supply chains open and remove trade-distorting measures.

As part of several country groupings that have reaffirmed support for multilateral trading systems NZ has joined calls on governments to support rather than hinder trade in agriculture and food.

“We are continuing to seek greater market access through high-quality and comprehensive free-trade agreements with the European Union as soon as possible and to commence negotiations with the United Kingdom in the near future.

“We are seeking to sign the China FTA upgrade and the Digital Economy Partnership Agreement (DEPA) with Singapore and Chile, conclude the Regional Comprehensive Economic Partnership agreement with Asia-Pacific partners and expand the Comprehensive and Progressive Trans Pacific Partnership.”

This year’s Budget included an extra $216 million for Trade and Enterprise to expand the scope of help it gives exporting firms.

“The primary sector has been and will for a very long time be at the heart of our exporting earning reality and potential,” Agriculture Minister Damian O’Connor says.

He sees the primary sector’s future in generating greater value from its produce rather than greater volume, within constraints of land area and environmental controls.

“If covid-19 has taught us anything it is that it highlights the importance of healthy eating, healthy production and healthy outcomes.”

This year’s Budget provided funding for environmental work on farms and increased trade assistance for exporters.

In the next few weeks the Primary Sector Council will launch its Fit for a Better Future document.

It will provide a blueprint to put NZ at the top of the food production pedestal by outlining a framework to improve farm systems, biosecurity and the continued quest to eradicate Mycoplasma bovis.

The latest quarterly economic forecast from the ASB says NZ’s agricultural sector is relatively well placed.

Forecast strong food-related export earnings will cushion the impact of weaker global economic demand on the wider export sector.

“The outbreak has caused supply chain disruptions across the world, impacting the global supply of key food commodities.

“With NZ’s food production less impacted from covid-19, NZ food exporters are well placed if global food supply weakens,” it says.

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