September Trade Update

It has been an interesting month on the trade policy front.

UK

New Zealand has failed to conclude negotiations with the UK and intensive discussions are continuing.  It seems that some unexpected differences have emerged that are more complex to resolve than anyone anticipated.  Minister Damien O’Connor’s visit to Europe and the UK in November is going to be very important in hopefully bringing these differences to resolution.

UK Trade Minister Liz Truss has been promoted to Foreign Secretary and has been replaced as Trade Secretary by Rt Hon Anne-Marie Trevelyan.  It is too early to determine whether Trevelyan’s position on the negotiation with New Zealand is any different to her predecessor.  Truss was committed to ambitious free trade outcomes and was willing to take on colleagues who did not necessarily share the same commitment.

Likewise it is too early to know whether the AUKUS arrangement has implications for UK trade policy.

EU

There have been no further meetings on the EU-NZ FTA.  Again Minister O’Connor’s visit to Europe is important to charting a way forward in that negotiation.

China

And finally China has surprised many by formally applying to join CPTPP.  Views on this, the motivation and timing for the application are mixed in New Zealand and around the region.  We would not anticipate this application progressing quickly.

New Zealand already has a good FTA with China so trade gains from Chinese entry to CPTPP will probably be limited.  China would need to undertake substantial SOE reform to join CPTPP.  These reforms would be welcome.

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