Trade agreements are tricky animals

There’s a lot of activity going on with trade negotiations at the moment, but not much certainty about outcomes.

 

Ranging from the TPP, the grandfather of them all from New Zealand’s point of view, to the murky negotiations with the Gulf Cooperation Council, the only deal signed off this year is the long awaited FTA with South Korea.Although this FTA is good news for our primary sector, it is only a comparatively minor achievement which should have already happened years ago. Even the much vaunted FTA with China appears to have been gazumped by Australia’s more recently signed agreement.

 

Getting agreement on TPP between all the signatories is a bit like the efforts to keep Greece in the Eurozone and, in spite of the US Senate’s vote to approve the fast track bill last week, there is still much detail to be resolved before all the parties can agree. In Trade Minister Tim Groser’s words yesterday the hard work is about to start, because detailed negotiations can only start when the USA is committed to the deal. It seems now, ironically with the support of the Republicans instead of the Democrats, this will actually happen.

 

From New Zealand’s perspective there is still a hell of a large volume of water to flow under the bridge before the TPP meets our requirements. Groser says he is pleased with progress on such important issues as protection of intellectual property rights and Pharmac, but acknowledges dairy is still far from being resolved. That is an understatement when one considers the enormous resistance from Japan, Canada and the USA to freeing up the global dairy trade.

 

If Groser manages to get an acceptable agreement on dairy, he will deserve the freedom of Hamilton and New Plymouth as well as a knighthood and free travel for life.

 

Getting a signed agreement with the Gulf States has been dragging on since 2009 when a trade agreement was reached but never signed. It now appears the problem goes back to the ban on live sheep exports with a Saudi investor feeling aggrieved by the impact of the ban on his business.

 

Now we all know trade negotiations happen mostly behind closed doors, otherwise they would never be concluded, but the apparently devious and ham-fisted attempts to get the FTA with the Gulf Cooperation Council across the line really takes the cake for Yes Minister political manoeuvring.

 

The facts aren’t entirely clear, but what appears to have happened, not necessarily in the right order is this. The Prime Minister leads a trade delegation to United Arab Emirates, Saudi Arabia and Kuwait, saying the agreement is close, but needs a final diplomatic push to get it over the line; news breaks of a high mortality rate on a sheep farm in Saudi Arabia, owned by Mahmood Al Khalaf and set up with $11 million of New Zealand funding, supposedly as an Agrihub to showcase New Zealand agriculture; the deaths involve 75% of lambs born to 900 ewes exported to Saudi Arabia by Hawkes Bay farming company Brownrigg Agriculture, Mahmood Al-Khalaf turns out to be a part owner of Brownrigg Agriculture and is also believed to be the aggrieved businessman.

 

Not unnaturally the opposition parties in Parliament have been trying to paint this as a Machiavellian plot masterminded by Foreign Minister and New Zealand’s answer to Machiavelli, Murray McCully. Right wing commentator Matthew Hooton says on Radio NZ National, McCully can’t survive and John Key keeps trying to blame Labour for causing a large financial liability in the first place, but can’t produce the papers to show that this was the case.

 

As usual Key refuses to acknowledge there is anything amiss and McCully has gone to ground. Also, more importantly, we are still waiting in vain for this amazingly inept diplomatic push to show the positive outcome desired of a FTA with the Gulf States.

 

The TAB will probably offer odds on which of these two trade agreements will come to fruition first. It’s anybody’s bet, but my money is on the TPP and Tim Groser.

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Tags: American Senate, Brownrigg Agriculture, Free Trade Agreements, Guld Cooperation Council, Gulf States, John Key, Kuwait, Machiavelli, Mahmood Al-Khalaf, Matthew Hooton, Murray McCully, Saudi Arabia, South Korean FTA, Tim Groser, Trans Pacific Partnership, UAE