UK Trade Deal with NZ – Erm!!
It is rather telling that while those in charge of the Brexit Trade Agreements in the UK have recently announced that they are about to negotiate a major bi-lateral trade deal with New Zealand that the NZ Minister responsible for their Primary Industries has just announced that formal negotiations for a Free Trade Agreement (FTA) between New Zealand and the European Union (EU) will begin later this year (2017).
There is of course strong historical links and relationships between New Zealand and the United Kingdom but the question remains in terms of world trade who is the most important to NZ – the United Kingdom or the European Union?
Perhaps for all of the posturing by Theresa May and her Government about agreeing a major trade agreement with New Zealand they should bear in mind, or perhaps they have forgotten that there already exists a long standing sheep meat quota between New Zealand and the European Union that is valuable and that the farmers, who by the way are very very influential in NZ, will demand has to be protected.
Which begs the question of what happens once the UK leaves the EU because they will no longer be a part of the agreement.
Will the UK expect to have or agree more favourable terms than the EU in trading with New Zealand?
And with the power that economic trading blocks of the size of the EU has can we really believe that they won’t use that power to remind New Zealand that there may be consequences, both in terms of trade and economic impact on NZ if they were to reach a more favourable agreement with the U.K.
There may be opportunities for New Zealand to meet and agree a bi-lateral trade agreement with the U.K. but be under no misapprehension that any deal with only take place providing it in no way threatens or damages trade between NZ and the EU.
The question for those leading the Brexit negotiations is just how many other countries who have trade agreements with the EU who the UK are courting as further trade partners will find themselves in the same position?
Trade agreements with a nation of 60 million or with a nation block of over 600 million?
I’m not an economist but it doesn’t need one to work it out which of them political leaders across the world will choose.