As this day dawns it seems that President Trump and President Xi Jinping have had a good phone chat and are due to meet at the G20 in Osaka.  Meanwhile the chances of a no deal Brexit are increasing.

Against this backdrop New Zealand has been continuing to progress the trade negotiation agenda.  Progress has been slow but the EU-New Zealand FTA process continues positively and there are signs that the Pacific Alliance process may be about to resume.  Ministers and officials remain upbeat about the China FTA upgrade.  And negotiations are about to begin on upgrading the AANZFTA agreement with ASEAN.

Trade Wars

The tariffs imposed by the US and China in the latest skirmish are beginning to take effect and trade distortion is becoming apparent. There are signs that tensions are playing out into the technology and academic research.  The fact that the two leaders are soon to meet (if it happens) is a good thing for the global economy.

While President Trump has delayed further action against the EU for six months his Twitter comments are giving the Europeans plenty of cause for concern.

Brexit

Companies would be wise to resume contingency planning for a hard Brexit.  Many will have had plans developed for earlier in the year.  Hopefully this will not happen but the risk must be increasing. The upside, should there be one, is that the chances of an early commencement of negotiations over a UK-NZ FTA are also increasing.

EU

Negotiations have struck the dairy issue.  The EU is seeking total exclusion of some parts of this important sector.  This is clearly unacceptable. Minister Parker is delivering this message clearly to his EU counterparts.

China FTA Upgrade

NZ-China relations are in a much stronger state than they were at the start of the year.  This has helped the FTA upgrade process.  Both sides are talking confidently about an outcome this year.

ASEAN

MFAT are seeking views on how the AANZFTA Agreement could usefully be updated.  We encourage companies to submit on this.

Pacific Alliance

A meeting of officials is pending to discuss the possibility of resuming negotiations on the expansion of the Pacific Alliance FTA to include Canada, New Zealand, Australia and Singapore.  These negotiations stalled after the changes of Government in Mexico and Colombia.

RCEP

According to Japanese media reporting, China has, for a second time, suggested the exclusion of India, Australia and New Zealand from the RCEP process.  This is potentially very negative for New Zealand interests.  New Zealand does not seem to be a target, but China is clearly deeply frustrated by the experience of negotiating with India.  Australia-China relations are currently at a low point.

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