UK trade deal still some way off

News UK trade deal still some way off

Britain is scrambling for trade deals before it leaves the European Union at the end of the year. Nigel Stirling asks just how easy getting a free trade deal with the United Kingdom will be for New Zealand.

RESERVATIONS: Former Trade Minister Lockwood Smith does not believe the UK is completely committed to free trade.

MOST of the time New Zealand negotiators are on the back foot in trade talks.

Our small consumer market and the dismantling in the 1980s of tariffs protecting local industries from imported competition leaves them precious little to bargain with.

Tougher still when top of your list of demands is the most difficult nut to crack in international trade negotiations – free trade in agricultural products.

Rarely does NZ enjoy the leverage as it has over the UK in talks now under way.

The UK is desperate for trade deals to replicate the EU’s own network of agreements it loses access to when it departs the 28-country trading bloc at the end of this year.

Along with the United States, Japan and Australia, NZ was one of the first countries the UK announced it would begin negotiations with.

NZ’s inclusion is more than a nod to the shared history of the two countries.

As a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership a deal with NZ would smooth the way for the UK to join the 11-country trade agreement and underpin market access for its exporters in the AsiaPacific region.

Former Trade Minister Lockwood Smith agrees the pressure is on the UK to do a deal with NZ but still has reservations about its commitment to free trade.

As a recent High Commissioner to London and a member of the pro-free trade think tank advising Boris Johnson’s government, the Legatum Institute, Smith is intimately involved in the trade debate in the UK – and he is not encouraged by what he is seeing.

The beginnings of a shift in attitudes under the previous leadership of Britain’s historically protectionistminded National Farmers Union is being undone by the current president Minnette Batters.

“The previous NFU president had accepted change needed to happen and had started work with his organisation on what sort of transition time was needed.

“He was thinking in terms of 5-10 years to transition to an unsubsidised future ... the current leadership of the NFU seems to be taking a step backwards.”

The US is bigger and more of a threat to UK farmers than NZ will ever be.

Charles Finny

That backsliding had spread to key figures in Johnson’s Cabinet including the Secretary of State for Environment, Food and Rural Affairs George Eustice and his influential predecessor Michael Gove.

Eustice is behind a proposal for a system of tiered tariffs which Smith claims will be based on “perceptions” of animal welfare and health standards rather than scientifically-based World Trade Organisation rules.

The highest tariffs would likely target chlorinated chicken imported from America which is banned in the EU and has become the focus of those in the UK opposed to a trade deal with the US.

“It would be a real shame if the UK goes down that path,” Smith said.

“One of the great benefits of the UK leaving the EU is to assume a greater leadership in international trade.

“And it sure is not going to be respected as a leader if it comes up with WTOincompatible proposals like tiered tariffs depending on how politically they perceive food safety issues ... we are still trying to get Boris’s team to understand that.”

Former trade negotiator Charles Finny is optimistic NZ will strike a reasonable deal with the UK but not quickly.

Delays in decisions on agricultural market access were likely while the UK negotiated the same with the US and the EU, which was likely to take some time given the size of the economies involved.

“Why would the UK want to give NZ a fantastic deal on agriculture when they know that the US will grab that deal and try and get better?

“In terms of dairy and everything else you name except sheep meat the US is bigger and more of a threat to UK farmers than NZ will ever be.

“We are never going to flood that market whereas the US could overnight – I assume that is why they started the US negotiation before ours.”

Dairy Companies Association chairman Malcolm Bailey said NZ exporters had not crashed prices in other markets where it had trade agreements, although he accepted that could be a difficult message for British farmers to absorb right now.

“They are faced with a lot of uncertainty. This is not just about a deal being done with NZ.

“They have to digest Brexit and what it means and I understand why the NFU on behalf of its farmers will be taking a stance which is very hesitant.

“But the desire of NZ exporters of these primary products is to get a good return in the market and not to lower pricing.

“We have got a long track record of being very constructive in the market and I think they should reflect on that.”

Smith believed British farmers would eventually be forced to give up the production-linked subsidies and tariffs protecting them from competition from the rest of the world, although it could take longer than NZ would ideally like.

That meant a trade deal with the UK similar to NZ’s 2003 agreement with China could be on the cards.

That provided NZ with immediate tariff-free entry for key dairy products but built in safeguards to protect Chinese farmers from surges in imports above pre-agreed levels by restoring tariffs to their preFTA levels till the start of the following year.

The key for NZ was that the safeguards all expire by 2024.

Smith said such an agreement would deal with the fear of British farmers that they would be bankrupted by a tide of increased imports, while satisfying NZ’s demands for free trade.

It would also give British farmers time to sharpen up to better handle increased competition.

Hurst takes arable reins at Fed Farmers

Annette Scott annette.scott@globalhq.co.nz

REIGNING arable farmer of the year Colin Hurst has been elected chairman of Federated Farmers’ arable section.

The South Canterbury cropping farmer replaces Wairarapa farmer Karen Williams, who has completed her three-year term.

Hurst brings wide experience and an acknowledged reputation for hard work, tenacity and leadership to the role.

He is keen to lift the profile of the arable sector among consumers and fellow farmers.

Sales of arable production and spending generated by the industry contributed $863 million to GDP in 2018.

Hurst will also be following his interest in science and innovation driving improved production and a lighter environmental footprint.

“Most people know we produce cereal grains used in bread and a host of other staples and all the malting barley needed by our brewers.

“We also grow the pasture seeds essential to our livestock farmers not to mention brassicas and other feed crops and seed production for domestic and international markets,” Hurst said.

The arable industry’s export receipts are forecast to hit $260m, a 10.2% increase, this financial year.

Hurst has farmed with his family on a 700 hectare mixed arable farm at Makikihi, south of Timaru, since the mid eighties.

The farm includes 250ha under irrigation, growing mostly autumn wheat, grass seed, plantain seed, radish seed and forestry with heifer grazing, dairy wintering and beef cattle finishing.

As well as serving Federated Farmers at national, regional and branch level Hurst has also dedicated countless hours to the South Canterbury Rural Support Trust, United Wheatgrowers and the Foundation for Arable Research.

Big boost to kiwi numbers

Hugh Stringleman hugh.stringleman@globalhq.co.nz

GOVERNMENT funds will be a big help in predator control in the Whangarei Heads area, Northland conservation groups and local authorities say.

Conservation Minister Eugenie Sage and

Regional Economic Development Minister

Shane Jones announced $6 million delivered through a government provider, Predator

Free 2050, to rid some 10,000ha of possums in five years.

The money will also help efforts to trap possums, mustelids and rats on 60,000ha from Whangarei city to the Heads.

Total budget for the plan is $27m, using significant in-kind contributions from community conservation groups, Northland

Regional Council, Whangarei District

Council, Kiwi Coast and the Department of

Conservation.

Jones has put $19.5m from the Provincial

Growth Fund into nine predator control programmes in Northland, Bay of Plenty, East

Cape, Hawke’s Bay, Manawatu-Whanganui and the West Coast.

Predator Free 2050 intends creating 12 jobs.

He has been a staunch advocate for farmers around the Seed Quality Management Authority table, on the Fertiliser Quality Council driving the development of a physical standard for fertiliser and at a multitude of local authority planning and hearing processes.

Vice-chairmen elected to the Federated Farmers arable board for 2020-21 are Brian Leadley, grains, David Birkett, seeds, Dion Fleming, maize, and Chris Dillon, forage.

FAR chairman Hugh Ritchie also takes a place

They’ve got their father’s eyes and their mother’s immunity.

TOP MAN: Colin Hurst brings wide industry experience and an acknowledged reputation to his new leadership role as Federated Farmers arable industry group chairman.

on the board.

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