A Trade Policy for Our Times (reprise)

These are definitely the best of times and the worst of times for trade.  The best of times because our economy is outward looking and competitive across many sectors. What’s more, unlike at other key moments in our economic history, we have options for trade growth.  The worst of times because protectionism is on the rise and America seems to be turning its back on global leadership of trade.

It is into these uncertain, troubling times that Prime Minister Bill English on 24 March released Trade Agenda 2030 to an audience of 300 business people brought together by NZIBF and the Auckland Chamber of Commerce.

The delicately termed trade strategy “refresh” has been underway for some time.  When we last wrote about here, we said the revised strategy had to be “more than a tweaking of what was there already”.  Trade Minister Todd McClay and officials have delivered on this.  The strategy has an ambitious target (90% of export value to be covered by FTAs by 2030) and is backed up by significant new funding for trade-related initiatives – $91.3 million if you count new diplomatic posts in Dublin and Colombo and including $75.6 million for MFAT and MPI to address issues such as non-tariff barriers, a matter of significant and rising concern to exporters.  The Government is also shaking up the bureaucracy with a new one-stop shop for exporters to report these barriers.

We also called for “more and better structures for consultation, more openness where possible, and more involvement by business and other stakeholders”.  This too has been delivered through the re-established Ministerial Advisory Group on Trade (an invention of former Trade Minister Jim Sutton) and a promise for more regular engagement with the public including of course Maori.

Trade Agenda 2030 comes with quite a bit of analysis about the direction of New Zealand trade and its increasing diversification.  This too is good to see.  The goal of adding value to volume, where possible, for more traditional sectors and the need to include the growing digital and services economies are covered, although the latter not in as much detail as some might like.

The strategy does not purport to answer all the questions pertaining to New Zealand’s trade competitiveness and positioning:  some of these are more a matter of domestic policy and regulation; others require further fleshing out over time.  How exactly will we engage with the US and its new direction on trade?  Can we keep Japan and others in the “TPP-minus 1” tent?  Can we use the WTO dispute settlement system more aggressively?  What is the place of investor-state dispute settlement in new generation FTAs?  What sort of new trade rules do we need for e-commerce or for the creative sector?  How will the Government deliver on the Trade Agenda’s “shift 4”*, which is the least developed section (who outside the beltway has ever heard of “NZ Inc Wrap Around”?).

Trade Agenda 2030 is welcome as an expression of a broad political vision.  But such vision needs to be accompanied by more detailed action plans with deliverables, performance indicators and accountabilities.  That’s something the Minister and officials with the help of the Ministerial Advisory Group can now turn their minds to.

Trade Agenda 2030 is a great platform for launching a wider discussion about trade.  It needs careful consideration by business, stakeholders and other political parties so that, to paraphrase Dickens, these best and worst of times can be turned into the age of wisdom, rather than the age of foolishness.

* Shfit 4 is “increasing the focus on helping exporters translate market access into market success”

This post was prepared by Stephen Jacobi, NZIBF Executive Director.  Stephen has accepted Minister McClay’s invitation to join the Ministerial Advisory Group.