For several years British Prime Minister Boris Johnson has boasted of the UK’s potential for a renewed leadership role in global trade talks once it was out of the European Union.
Last year it signed heavyweight trade agreements with Japan and the EU, and British Trade Minister Liz Truss claims to be closing in on another with the United States.
And last week it upped the ante again after it said it will soon make a formal request to join the CPTPP which includes NZ and 10 other Pacific Rim countries and, until the recent signing of the Regional Comprehensive Economic Partnership (RCEP), was the world’s largest free trade agreement.
Britain has also been in talks for a separate trade deal with NZ since June.
Those talks are at an early stage with no market access offers tabled so far.
The Dairy Companies Association of NZ (DCANZ) chair Malcolm Bailey says the UK’s intention to join the CPTPP should not detract from future market access offers in its talks with NZ.
“The UK’s application to join CPTPP is another great sign of its interest in advancing global trade liberalisation,” Bailey said.
“However, the real test of UK trade leadership comes from how it honours its existing commitments and what it is prepared to put on the table in negotiations.”
DCANZ executive director Kimberly Crewther says the UK’s long-standing tariff-free trade with the EU – which will continue under its recently concluded trade deal – should be expanded in its free trade talks with NZ.
“The UK is not a country that is negotiating to liberalise its dairy market for the first time,” Crewther said.
“It has liberalised its dairy market for European exporters.
“This would be giving NZ exporters equal treatment to what the UK is giving EU exporters rather than continuing to treat us like poor and unfavoured cousins.”
Crewther says NZ negotiators should not be fobbed off with assurances that a limited opening of markets in bilateral talks will be fixed up later in the CPTPP.
The dairy industry has been down that path before with NZ’s trade deal with South Korea in 2014.
That deal created a tariff-free quota of milk powder of a mere 1,500 tonnes a year – then equal to two days’ production from Fonterra’s Edendale factory, rising to 1,957 tonnes by 2024, above which NZ dairy exports faced a 176% tariff.
At the time, the dairy industry said it hoped for a better deal from the Koreans in CPTPP.
Six years later they remain outside the Pacific Rim agreement despite previous indications they were eager to join.
And, the industry got no more quota out of South Korea in the recently completed RCEP negotiations.
Meat Industry Association chief executive Sirma Karapeeva agreed the UK needed to put its best offer on the table now.
“If they cannot do a good deal with NZ – a good solid trade partner with long-standing trade into the UK – there would have to be questions asked about what sort of deal they could do with CPTPP members, which are quite diverse and have a whole host of different regulatory and commercial systems and infrastructures in place,” Karapeeva said.
As an original signatory to CPTPP, NZ does have added leverage over the UK in bilateral talks, but there are doubts over how far it would push that advantage.
A Beehive source last year said NZ would be unlikely to veto the UK’s application to join the CPTPP for fear of provoking a backlash from its Pacific Rim partners eager for the world’s fifth largest economy to join their ranks.
Trade Minister Damien O’Connor says CPTPP countries had set a high standard in their original agreement to liberalise trade between themselves and expected that to continue as more countries joined.
“With the UK set to be the first to make such a formal request following the entry into force of the CPTPP, it will be important to set a strong precedent which reinforces the commitment of new members to fully deliver the high standards, including on market access, that are a hallmark of the CPTPP,” O’Connor said.
