New Trade Minister Todd McClay is calling time on the previous government’s use of trade agreements to promote its own ideological agenda at the expense of market access gains for exporters.
McClay said he intends to review the Labour Government’s Trade for All agenda, which elevated environmental issues, including climate change, labour rights, gender equality, and the rights of indigenous people, among other issues, as priorities for New Zealand trade negotiators.
“I have sent a signal that the time for internal papers about what trade should be is over,” McClay said.
Agenda demands by McClay’s predecessor, Damien O’Connor, two years ago are understood to have led to the oil-rich Gulf Cooperation Council (GCC) withdrawing an offer to scrap tariffs on agricultural products from NZ worth $60 million annually to exporters.
McClay will attempt to salvage the deal when he travels to the region early next year.
“It is important that we meet our climate change obligations and many other things, but trade agreements are about trade first and foremost.
“The other things we might like to talk about, we will see how that goes, but ultimately the way to crack the GCC is through a good old discussion about tariff rates and access.”
McClay, who as trade minister in the previous National-led government laid the groundwork for the European Union-NZ free trade agreement concluded by the Labour Government last year, faces much leaner prospects for new deals this time around.
He will have a tough task getting talks with India back on track, and apart from completing the GCC negotiations, and expanding the Comprehensive and Progressive TransPacific Partnership (CPTPP), there is little else on the horizon for negotiators to get their teeth into amid what is looking like an increasingly hostile environment globally for free trade.
As such McClay doesn’t wish to be judged solely by the number of trade deals he can do but what role he can play in helping exporters be successful in overseas markets.
“We have said we are going to lead more trade missions than any other government has previously and get more from our existing trade deals.”
McClay said he had already asked officials to draw up a list of non-tariff barriers (NTBs) faced by exporters in overseas markets. The Meat Industry Association in a recent report said NTBs could be costing the industry up to $1.5 billion a year.
McClay also asked for an assessment of the legal firepower within the government to take the fight to trading partners refusing to play by the rules set out in their agreements with NZ.
“I am not signalling there are going to be a whole lot of new legal challenges straight away but we are going to be looking at non-tariff barriers and how we level the playing field so that exporters are treated fairly.
“NZ meets its obligations in these agreements, and we expect others to do the same.”
The other big challenge facing McClay will be his relationship with NZ’s biggest trading partner, China, particularly its application to join CPTPP.
China’s patience will be wearing thin after being kept on the sidelines while the existing members complete a review of accession protocols.
It will also be eager to gather supporters after CPTPP heavyweights Australia, Japan and Canada all expressed reservations about China’s ability to meet the agreement’s free trade standards.
Asked whether he thought China meets those standards, McClay played it safe.
“I can’t speak to that now but certainly as far as our trade agreement with China is concerned then the answer would certainly be yes.
“But what their offer would be as far as joining CPTPP we have to wait and see.”