Australia and NZ both began talks with the UK nearly a year ago and both countries have completed four negotiating rounds with their British counterparts.
Progress on the key matter of agricultural market access has been slow-going for NZ negotiators who have publicly declared the offer on the table from the UK as short of what is needed to conclude a deal.
British media reports in recent weeks suggested talks with the Australians were even slower and that NZ was ahead in the race to clinch a deal with the UK.
The reports were later dismissed by Wellington insiders as negotiating tactics from the British ahead of a visit by Australian Trade Minister Dan Tehan for face-to-face talks with UK counterpart Liz Truss in London late last month.
But the tactics may have worked judging by the joint statement from Tehan and Truss following their meeting in which they declared the “vast majority” of the deal done and set a June deadline for concluding the rest.
The tight deadline has sparked concern on this side of the Tasman that the Australians have left themselves short of time to negotiate a meaningful opening up of the UK market to key agricultural imports.
Australian media reported the removal of agricultural tariffs and quotas are among the areas still to be resolved in the talks.
The NZ government’s former agricultural trade envoy Mike Petersen says by accepting a low-quality deal the Australians are backing NZ’s negotiators into a corner with the British.
“It becomes very easy for the UK negotiators to say ‘here is what we have agreed with Australia, so why would we not agree the same deal with you?’” Peterson said.
“It is the precedent that becomes really difficult for our negotiators.”
It would not be the first time Australia has left the ANZAC spirit at the door to get one over NZ in trade talks.
Australia broke ranks in the crucial final stages of the TransPacific Partnership in 2014 when it signed a deal with Japan to lower beef and dairy tariffs in a separate agreement between the two countries.
The agreement outraged NZ exporters at the time, who felt the Australians, in return for a short-term tariff advantage, had spoiled the chance to get bigger tariff reductions for all TPP countries in the heavily protected Japanese market.
A similar scenario is playing out again with the UK lining up to join the TPP’s successor agreement, the Comprehensive and Progressive TransPacific Partnership (CPTPP) later this year.
Dairy Companies Association NZ chair Malcolm Bailey says Australia was taking a big risk if it believed it could get a better deal out of the British in the CPTPP talks to come.
“History shows that rushing to conclude a deal and having the ambition at a lower level and then working on the assumption that there will be an opportunity to upgrade in the future, that path is fraught and experience shows it does not work,” Bailey said.
“We do reflect on the Australian deal with Japan pre-TPP and talking to some of the Aussie (dairy exporters) at the time they were confident they would get another bite of the cherry in TPP, but that did not really happen.
“So, the lesson is take the time to get it right rather than the quick and dirty approach which really does not cut it.”
