NZ-EU trade deal is economically and strategically important in world on brink of trade war
By Rebecca Howard
June 21 (BusinessDesk) - European Union trade commissioner Cecilia Malmström says a trade deal with New Zealand is economically and strategically important for the massive European market in a world on the verge of a trade war.
In a visit to Wellington to formally launch trade talks she repeatedly voiced concerns about trade issues that have roiled markets in recent weeks after the US Donald Trump administration imposed steel and aluminium tariffs and the US and China stepped up their rhetoric.
“We are very worried about this, of course, it could escalate to a full trade war which would be bad for the whole world," she said. "We are worried that countries are acting outside the rules."
While Malmström said the World Trade Organisation is “not perfect” and needs modernising, she also said it “has served us well … It’s a rule-based system where 164 countries are members and basically follow the rules.”
She said the EU is trying to work with partners and “New Zealand is a very strong partner" to strengthen and elaborate new rules for the WTO.
Earlier this week, Malmström announced the EU would impose "rebalancing measures" in response to US steel and aluminium tariffs that would target around 2.8 billion euros worth of products including items such as motorcycles and yachts as well as playing cards.
She told journalists Thursday that some items were chosen where there is an alternative for European consumers but "some of them are a bit iconic." According to Malmström, "we want to make noise in the US debate. If we can't convince our American partners, maybe the American businesses, American consumers and American politicians can," she said.
When asked if she wasn't just risking an escalation of the trade war she said that "we can't just do nothing. This is hurting European jobs and the European economy and is a clear violation of the WTO."
Against that backdrop, she said the deal with New Zealand "underlines the political, strategic element of these agreements, with New Zealand and also with many other partners. Those who believe in fair, mutually beneficial trade - we must stand up."
She said she shared Trump's criticism that China is dumping steel and aluminium and "a few other products" on the global market through massive subsidies "but just throwing out tariffs to the whole world is not the right way to address this."