This week Jacinda Ardern and New Zealand concluded a free trade agreement with the European Union.
The benefits are not to be sniffed at:
But some of the response both leading up to and following the successful conclusion of the negotiations are derisory.
And Radio New Zealand should have a deep think about things. Because its description of Ardern’s approach to negotiations as scattering stardust is the sort of misogynistic crap I expect from Mike Hosking and his ilk, not a State broadcaster.
The analysis was of a similar quality to the headline. As an example the author, Geoff Miller said this:
And when it comes to New Zealand’s key agricultural exports, the prospects for a favourable deal are bleak.
Malcolm Bailey, the chairman of the Dairy Companies Association of New Zealand, says the EU is ‘doubling-down on keeping its market almost entirely shut to New Zealand dairy exporters’.
The EU’s initial market offer to New Zealand, leaked in 2020, included an export quota of just 1500 tonnes of cheese annually – and just 600 tonnes of butter.
The final agreement will no doubt bring some improvement on this low-ball offer, but probably not much.
The final deal was considerably improved over this rather gloomy prediction. The deal is worth $600 million in annual export revenue for the dairy and red meat sectors once fully implemented.
Permitted cheese imports will be 25,000 tonnes a year in seven years time, starting with a figure of 8,333 tonnes on day one.
And butter imports will rise to 15,000 metric tonnes in seven years as well as there being a significant reduction in tarriffs on a further 21,000 tonnes.
Miller’s conclusion that the final agreement will improve the initial offer but probably not by much should be sufficient for him to be excluded from the pundit’s union. Because it is clearly unquestionably wrong,
He then makes disparaging comments suggesting that New Zealand has sold its soul to the west to get a better deal but then concludes by saying this:
Jacinda Ardern is about to scatter stardust over Brussels. But it could all be in vain.
It is time for Miller to eat his words.
Following the announcement of the deal the reactions were almost universally negative. National’s puppets, the Dairy and Beef farmer representative organisations complained that it was a very bad thing. From Reuteurs:
Simon Tucker, a director of trade at dairy giant Fonterra (FCG.NZ), said in a statement that outcomes for dairy were very disappointing and reflect the degree of protectionism afflicting dairy trade globally.
Tucker said new commercial opportunities from the FTA for dairy products remained constrained relative to the relative size of the market.
Sirma Karapeeva, chief executive of the Meat Industry Association, added in a separate statement the FTA did not provide commercially meaningful access for meat exporters.
“With more volatility in global markets, diversification is important, and a high-quality FTA with the EU was critical in helping us achieve this,” she said.
New Zealand agriculture exporters have long struggled to get good access to the market and analysts say the outcome should not have come as a huge surprise.
I am not sure of what Karapeeva thinks is “commercially meaningful” but the deal increases duty free quota for sheep meat from 125,000 tonnes to 163,000 over the next seven years. And beef tariffs are more than halved and access increased from 1,102 tonnes of high quality beef to 10,000 tonnes after seven years.
And there is another aspect that the farming interests appear to be completely indifferent to. They seem to think that production of meat and dairy can continue to increase. But the country cannot environmentally sustain any more farming and in fact we need to reduce the effects of dairy and beef farming rather dramatically if we are to meet our greenhouse emissions targets. There is a short term potential transition for dairy and beef farming moving to the production of higher quality goods while at the same time reducing greenhouse gas emissions, something that the free trade agreement will actually help implement. But continued growth in the sector is a misguided dream.
The opposition have also engaged in politics as usual with complaints that Ardern should have stayed longer at the table and not agreed until there was a better deal on offer. Their arrogance and their stupidity is incredible. Throwing tantrums and drawing out negotiations are not a way to get better deals when dealing with one of the most sophisticated trade groupings in the history of the world.
Although Todd McClay rather gave things away by praising New Zealand’s free trade agreement with the United Kingdom and with China, both of which were concluded by Labour Governments with the FTA with China having recently been upgraded.
Overall I am bemused that the predictions were so negative, the results are significantly better than what had been anticipated, yet National and its puppets get to engage in fact free rhetoric accentuated by the national broadcaster in a he said she said fashion.
There is one further aspect that opponents refuse to acknowledge. Ardern’s standing in the world is such that she is able to gain advantage for New Zealand in a way that I don’t think any previous leader has ever been able to accomplish. This is yet another example of her star power.
If this is an example of Jacinda scattering stardust then long may she continue to do so.
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