NZ/UK trade agreement: first in, best dressed

As predicted, Todd McClay is in action immediately seeking to talk trade with UK and EU ministers.

Trade Minister Todd McClay is seeking meetings about Brexit with his counterparts from the European Union and Britain at a G20 trade ministers meeting in China to which New Zealand has been invited.

He said he wanted to discuss New Zealand’s best way forward in light of Britain’s vote to leave the EU.

“In the meantime, it is important for exporters to be assured that our economic relationship with the UK and Europe will remain the same for the foreseeable future.

“Even before Friday’s referendum, we had sought assurances from UK and EU officials that the rules around New Zealand access would not change until they have negotiated new ones with us,” he said.

“We have received those assurances.” ?

Britain has yet to give legal notice to the EU to quit under Article 50 of the 2009 Lisbon Treaty.

Once it does, it has up to two years to negotiation an exit deal, which will effectively involve its own trade deal with the EU.

Mr McClay said he expected to meet with many European counterparts at the meeting in Shanghai on July 9 and 10.

EU Trade Commissioner Cecilia Malmstrom and UK Minister of State for Trade and Investment will be among the attendees.

Mr McClay is in regular contain with Ms Malmstrom because New Zealand in the midst of preparations to launch FTA negotiations with the EU.

He did not believe that progress on a EU-NZ free trade agreement – a possible conclusion in 2019 – would be significantly affected.

“While it is still very early days in the joint scoping exercise, we are working towards a possible launch of negotiations during 2017 with a potential two-year negotiation,” he told the Herald.

If you look at the list of?the?biggest economies in?the?world, of the top ten only four are?EU nations: Germany, the UK,?France and Italy. Of them, the UK is leaving the EU, and France and Italy are talking about it, leaving Germany as a player. If France and Italy also leave then?the?EU is going to suffer significantly in relevance in world trade. If four of the top ten economies in the world leave the EU then?the?EU is dead.

Focussing on trade with the UK is the best option. Get in first, cut a deal and grow from there. To put things in perspective, check out the interactive map of Statistics NZ. It shows that our trade with the UK is more than double that with Germany. Germany is second, but France and Italy aren’t that far behind. To further discount the impact of Europe for NZ, China is over 7 times the value of exports than Germany, and Australia 14 times. Europe, after France and Italy leave the EU, is essentially worthless to us.

It is the EU that is vulnerable, propped up by those big economies of which two more are set to bolt with the UK.


– NZ Herald