A Trade Policy for our times

The Government is “refreshing” its trade policy strategy. That’s both admirable and timely.

The existing strategy coined a generation ago by former Trade Minister Tim Groser when still an MFAT official has served New Zealand well.  It saw in the successful conclusion of the Uruguay Round, the inauguration of the WTO and led to the negotiation of a suite of high quality FTAs including the as yet unratified TPP.

The world looks vastly different today but no less uncertain.  Back then it was unknown whether the Uruguay Round would be concluded.  Today we face the same uncertainty with TPP.  Back then we were worried about rising protectionism and being excluded from new trading blocs.  What’s new?

In that time business has changed profoundly.  Global value chains are transforming business models.  The challenges faced by business are also different.  To the still urgent, unfinished business of tariff elimination for mainly agricultural goods, there now needs to be added more effective ways of addressing non-tariff barriers, improved conditions for a new generation of services industries, better conditions for outward and inward foreign investment, new rules for the digital economy and e-commerce, new ways of fostering innovation.   SMEs and the fast moving tech and creative sectors want in.  There are new pressures for a better integration of environmental and labour disciplines. Who are our new partners for high quality FTAs and what prospect is there to revive the WTO?

If we have learnt anything about the fractious debate about TPP, it is surely that we have to explain the benefits of trade and investment to a sceptical public.  Those benefits include jobs and livelihoods, a richer variety of goods and services and new opportunities at all levels.  Yet clearly we have to make trade work even better for people, especially those who face the challenges of adjustment.  That means more and better structures for consultation, more openness where possible, and more involvement by business and other stakeholders.

Trade Minister McClay has made a good start by holding public meetings about the strategy.  Hopefully these are occasions for listening as well as talking.  The times require a new strategy to respond both to the new demands of business and also the public disquiet about the pace and extent of globalisation.  That requires more than just a tweaking of what’s there already.

This post has been prepared by Stephen Jacobi, Executive Director of the NZ International Business Forum.