Trade and Export Growth Minister Damien O'Connor is about to make the first overseas trip by a minister since the Covid-19 pandemic - will his effort be justified by gains in free trade talks with the UK and EU?
Let it not be said that Damien O’Connor is unwilling to make personal sacrifices for his country.
The Trade and Export Growth Minister flies to Europe early on Sunday morning for a week-long series of trade talks, the cost of which is a 14-day stay in a managed isolation facility upon his return to New Zealand (he promised the time will be spent working rather than catching up on Netflix).
But the Government’s hope is the trip will be rewarded with meaningful progress on free trade agreement negotiations with the United Kingdom and the European Union.
At a media briefing ahead of his visit, O’Connor said it was not realistic to expect either of the FTAs to be wrapped up before he left, but he hoped to make headway on some of the more sensitive issues facing negotiators.
Discussions in London with British International Trade Secretary Liz Truss may be more fruitful after the pair agreed to accelerate negotiations earlier in the year.
New Zealand is still some way behind Australia, with some suggestions a UK-Australia deal could be signed in the wake of the G7 summit next week, although O’Connor said it was not a race to see who could be first.
The major stumbling block (as with most New Zealand trade negotiations) is agriculture, with British farmers having expressed fears about a flood of imports from both Australia and New Zealand.
In a potentially ominous sign for Kiwi negotiators, Australian Trade Minister Dan Tehan this week flagged the possibility of his government walking away from talks with the UK, telling Sky News Australia: “I’m confident that we will get there – but in the end, if the ultimate agreement isn’t in our national interest, then obviously we won’t be signing up to it.”
“In total we can probably feed 40 million people: clearly China is our number one market, Southeast Asia and other markets consume a lot of our produce, so the amount left to go into the UK and EU is not that great.”
O’Connor was reluctant to comment on the implications of Tehan’s remarks for New Zealand’s prospects of getting a satisfactory deal, but said the Government would not “sacrifice quality for speed” in its talks.
Part of his work in Europe would include meeting with agricultural sector leaders to offer assurances that Kiwi exporters were not in a position to flood the market with cheap beef and sheep meat and force their farmers out of business.
“In total we can probably feed 40 million people: clearly China is our number one market, Southeast Asia and other markets consume a lot of our produce, so the amount left to go into the UK and EU is not that great.”
O’Connor described zero-tariff market access to the UK within 10 years as “a good ambition”, although he would not confirm whether that was a bottom line for New Zealand in talks.
He said some leverage came from the UK’s open desire to negotiate trade agreements as part of its post-Brexit strategy and the associated pressure to provide proof of concept with both Australia and New Zealand.
No such motivation applies to the EU, where talks seem to have hit a rut despite 10 rounds and counting of negotiations.
But despite concerns about its unwillingness to make a meaningful market access offer, O’Connor said he was confident of making headway given alignment between the two partners on issues like social justice, democratic systems and environmental protections.
“One of the things that is of great interest to them is how we are working through the process of inclusion of agricultural emissions in our emissions trading system, not shying away from that challenge. They want to learn more from us around animal welfare standards, around labour standards, all of those things are shared values - I think they enjoy the opportunity to be connected with us.”
CPTPP set to feature
There are a number of trade issues beyond the FTAs set to be raised, including the UK’s desire to join the Comprehensive and Progressive Agreement on Trans-Pacific Partnership, or CPTPP for (mercifully) short.
O’Connor said it was inevitable the CPTPP would come up in his discussions with British politicians and officials after the UK formally notified its desire to sign up, but all the trade pact’s 11 members would have to be involved in the official accession process.
Another likely topic of discussion is the flow-on effects of Brexit for New Zealand exporters: namely the ongoing uncertainty over the status of the Northern Ireland border - although as O’Connor noted, “it might not be possible for us to resolve our [issues] until they solve theirs” - and the long-running dispute over how the UK and EU have split up their tariff rate quotas for New Zealand products.
“Clearly the flexibility that we've had on the tariff rate quota for between the EU and UK is now restricted, and we want to be no worse off - we don't expect to be any better off.”
Any quota compromise would likely be overtaken by the signing of FTAs, although the minister was not willing to concede the status quo would remain until that point: “I'm not going to give any ground here, we'll leave it to the negotiators.”
O’Connor is visiting Singapore en route to Europe, where he will meet the country’s trade minister Gan Kim Yong and environment Minister Grace Fu, while he will also have a brief stint in Paris to speak with his French counterpart Frank Riester.
