Squeezing more from existing trade deals may require domestic policy tweaks, McClay says

Monday 5th September 2016

The New Zealand government will have to work more closely with local businesses and may need to tinker with domestic policy to get the most out of the nation's free-trade agreements, Trade Minister Todd McClay says.

McClay is holding a series of public meetings on a planned refresh of the government's trade policy, which includes increased efforts to get more out of existing deals covering more than half the country's exports. The minister didn't rule out negotiating new agreements or upgrading existing ones, but said the new emphasis will be on getting the most out of current deals and will need more coordination between government and the private sector.

"Business has also pointed out that greater emphasis on implementation of existing agreements will also highlight the importance of alignment of New Zealand's domestic policy settings with those agreements," McClay said in a speech in Wellington. "New Zealand's trade policy strategy and New Zealand's overall economic strategy need to be mutually supportive."

Efforts to boost the returns from existing trade deals comes amid signs the Trans-Pacific Partnership according is stalling in the US, where both presidential candidate have said they'll oppose it because of the threat it may pose to American jobs and businesses. The New Zealand government has a goal of lifting exports to 40 percent of gross domestic product, though government figures show exports of goods and services in the March year $69.8 billion was about 31 percent of the country's GDP, up from about 28 percent in 2008, the year before the current National-led administration took office.

McClay said other shifts in policy will be in putting more effort in pulling down non-tariff barriers, recognising the increased importance of service and investment as digital trade changes the way goods move around the world, and putting more resources into helping businesses compete in foreign markets.

He also reiterated his view that the World Trade Organisation remained the only forum where New Zealand can help set global trade rules and make headway in reducing agricultural subsidies.

"An important medium-term goal as part of a refreshed New Zealand trade policy strategy should be to seek to reinvigorate multilateral trade negotiations centred on the WTO," he said.

BusinessDesk.co.nz

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