Q+A: Trade Minister Todd McClay interviewed by Corin Dann
Q+A: Trade Minister Todd McClay interviewed by Corin Dann
Trade Minister Todd McClay – not
ruling out a conversation around Chinese workers coming to
New Zealand to work on infrastructure projects as part of
trade talks.
‘Yeah, well, that’s not something that’s on the table at the moment, but, look, what we’ve agreed as part of the, you know, when we start the upgrade negotiation, both sides can raise issues that are of importance to them. We’ve got a list of things we want to talk about. China may well have.’
CORIN
Sorry to labour this point, but on the issue of
labour, of workers coming as part of those infrastructure
projects…
TODD
I think I can foresee challenges around that at
this time. But we also need to be mindful that as our
economy grows, as we want to export more, we’re going to
have to look for ways to meet the requirements of business
and industry.
Trade Minister Todd McClay told Q+A that ‘China wants us to be part of the Belt and Road initiative, and we’ve signalled that we’re very interested in that.’
‘I would like us to play a very big role in that.’
Todd McClay also said that setting a very ambitious target of 90% of New Zealand’s goods… trade covered by FTAs by 2030 is something that we believe is achievable but it’s going to take a lot of hard work.
‘That means we’ve got to finish all the agreements we have under negotiation at the moment. We need to make sure that Japan and India are a part of that. We need the EU Certainly the UK when they’re in a position to do so. But, Corin, it does also mean that we’ll have to do a deal over the next 10 to 12 years with the U.S.’
Please find the full transcript attached and you can watch the interview here.
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Q + A
Episode
03
TODD
McCLAY
Interviewed by CORIN
DANN
TODD I
don't think protectionism is anything new. During the
global
financial crisis, for instance, the G20 countries
put in place about
1800 protectionist measures, and since
then they've only taken 500 or
600 of those away, and so
New Zealand's always had to deal with
challenges of
getting good and fair access into markets. We need to
be
very mindful that the U.S. is now suggesting they're
going to go in a
different direction than they have
previously. I think we still need to wait and see exactly
what the U.S. trade... the administration's trade
policy
will be because it's very early days. But I guess the launch
of the Agenda 2030 strategy by the Prime Minister on Friday
is a very clear signal of the importance of trade to New
Zealand, and that the
New Zealand government is going to
go out and look for new opportunities and fight for better
access and rights for Kiwis
overseas.
CORIN Sure.
Let’s look at that. I’m sure many exporters will be very
encouraged about the fact that you’ve got this goal where
you want 90% of our trade covered by free trade deals. A bit
like an insurance policy. But, surely, if you’re going to
get 90%, you have to have America in there. Now, how is that
possible, certainly in the next four years under Trump, but
under an America that’s going in a different
direction?
TODD Well,
no, that’s right. So setting a very ambitious target of
90% of New Zealand’s goods… trade covered by FTAs by
2030 is something that we believe is achievable but it’s
going to take a lot of hard work. That means we’ve got to
finish all the agreements we have under negotiation at the
moment. We need to make sure that Japan and India are a part
of that. We need the E.U. Certainly the U.K. when they’re
in a position to do so. But, Corin, it does also mean that
we’ll have to do a deal over the next 10 to 12 years with
the U.S. All I would say in trade terms, is nothing happens
quickly including the unpicking of agreements. And the Prime
Minister has asked me to get up to Washington as soon as my
counterpart is in place to start building that relationship
with the new administration and looking for
opportunities.
CORIN Even
Bill English has said that it’s unlikely the U.S. will
offer us a deal that is acceptable to us. I mean, the TPP as
it was caused huge controversy as it was. Surely, is it
realistic to be thinking that we can ever get a deal with
the U.S. that’s going to be acceptable?
TODD Well, New
Zealand must be ambitious and the government must be. I
think with the suggestion of greater protections coming out
of the U.S., countries of the world have two choices. They
can either give up and stop trading or do what the New
Zealand government is going to do, is go out and look for
more opportunities and push harder than we have ever done
before.
CORIN But
it does come back, ultimately, to what we can offer
countries like the United States. So, surely, it only means
that we can offer up Pharmac, more access in terms of their
investment, those sorts of things, and New Zealanders are
very uncomfortable about
that.
TODD Well, I
think that that demonstrates how challenging it is for a
small country of 4.5 million people, a long way from the
rest of the world; how difficult it is for us to go out and
do deals because, largely, the size of our economy doesn’t
add as much as it does for others when they want to do a
negotiation. But if you look at China, they chose us as the
first country in the world to do a high-quality FTA. If we
look at our trade flows with the U.S. currently, it’s our
number-one beef market, our number-one wine market,
number-two dairy market. The trade balance is very, very
good, but, ultimately, we’re going to have to work hard
and find reasons for them to want to do a deal with New
Zealand. You mentioned a couple of issues in TPP, Pharmac
being one of them. We were very clear, and there are certain
things that can never be on the table when it comes to a
trade negotiation. That makes it more difficult when you
want to negotiate with very large countries or groups of
countries. But it’s a clear signal Trade Agenda 2030, on
the part of the government, that we must be out there
promoting the interests of
Kiwis.
CORIN So you
won’t give up on the U.S. Let’s talk about China,
because we are looking at trying to improve our current
free-trade deal with them. That will be a focus of Li
Keqiang’s visit on Monday. Again, what can we offer China
to encourage them to do a decent upgrade of that deal? What
do we have to put on the table in
return?
TODD Well,
New Zealand has a very strong reputation around the world
for being fair when it comes to trade. The reason, I think,
China decided to do its first FTA with New Zealand was they
knew that it would be one that they would be able to stand
behind and use as a model going forward. They’ve now
agreed at the end of last year, it’s another first with
New Zealand - the first upgrade of an existing agreement.
And so we’ve had officials going through a process to look
at exactly what we might want to work through. My
expectation is that it’s going to be about improving that
agreement. And the focus of the New Zealand government,
particularly, is going to be around these non-tariff
measures. Not the tariff rates but all of the other things
– the bureaucracy that gets in the way of Kiwis doing as
well as we need them to do in China. And so our prime
minister in meeting the premier of China over the weekend
will be pushing pretty hard for a launch date for that
negotiation.
CORIN I
wonder, though, because we’re seeing out of Australia –
just to give our viewers some context – China is pushing a
thing called the ‘One Belt, One Road’ strategy which is
to build overland roads, rail, inland ports, all throughout
its region, but down into the Pacific. It wants countries
like Australia and, presumably, New Zealand to be involved
in that. It’s a huge economic push out into our region,
securing trade routes and investing trillions of dollars in
ports and infrastructure.
Li Keqiang is going to come
here, isn’t he, and he’s going to want us to be buying
into
that.
TODD Well,
China wants us to be part of the Belt and Road initiative,
and we’ve signalled that we’re very interested in that.
We’ve got to be careful that we don’t just think it’s
about building roads. Actually, it’s about connectivity,
it’s about goods and services flowing in and out of China,
and further afield, through all the way
to…
CORIN
So, are we going to be part of
it?
TODD Well, I
would like us to play a very big role in that. Think about
the digital economy and its increasing importance to New
Zealand. You know, if you look at the way that New
Zealanders buy and sell goods and services over the
Internet, the modern Belt and Road initiatives, or The Silk
Road, actually can be about better connectivity and digital
connectivity. All parts of New Zealand, by the way, can then
play a part or benefit from trade agreements. So I look
forward to the conversations, and I think that we can get to
a position where it’s beneficial for New
Zealand.
CORIN Does
it mean that Chinese government, companies, would come to
New Zealand and help build our infrastructure and
ports?
TODD Well,
already we look around the world to different companies to
come and partner with New Zealand, both in construction….
We have in some cases looked towards PPP’s. You know,
whenever a company wants to come to New
Zealand…
CORIN So
there will be opportunities for China to do
that?
TODD Yeah. I
think there could well be. Now, it’s not the government
itself in China that might come and do that, but, you know,
where there are opportunities to grow our economy and
infrastructure from anywhere in the world, I think, as an
open economy, we should consider that
conversation.
CORIN So
that’s interesting. We’re open to talking to the Chinese
about them
investing…
TODD As
we’re open to people from around the
world.
CORIN I
guess the issue that might worry some New Zealanders is if
the Chinese do come, would we allow for their labour to come
as part of the
deal?
TODD Yeah,
well, that’s not something that’s on the table at the
moment, but, look, what we’ve agreed as part of the, you
know, when we start the upgrade negotiation, both sides can
raise issues that are of importance to them. We’ve got a
list of things we want to talk about. China may well have.
But, actually, the focus for me will be about how we can
grow the economy. So if we step back from that at the
moment, there are from all around the world, including
China, people coming here wanting to build hotels,
high-quality hotels. We know that as tourists grow… as
export income from tourism grows, we need more
infrastructure. That’s something we should seriously
consider.
CORIN I
agree. So we clearly need their expertise in certain areas,
but, I guess, in that discussion that you will have around
the trade, is it fair to say they will likely want to talk
about labour; workers coming here? Are we going to have that
conversation, at the least, if not necessarily agree to
anything?
TODD Well,
whenever we sit down and have a trade negotiation… So
we’re about to launch on with the European Union soon.
There’s a very wide range of things we consider. One of
the things I’m keen with the European Union is to make
sure that Kiwis continue to have good access to those
markets and can get to work there. So, you know, if China
wants to raise,… as we’ll raise issues as well, we’ll
just have to make sure that our settings are fit for purpose
in New Zealand and that whatever we agree is in the
interests of New Zealand. But that’s not something
that’s directly in front of me at this
time.
CORIN But are
you open to that idea? Do you think that that makes
sense?
TODD Well,
I’m open to having a conversation with China, the EU, the
US, with others about how we can arrange our trade deals
that are beneficial to the two sides in New
Zealand.
CORIN Sorry
to labour this point, but on the issue of labour, of workers
coming as part of those infrastructure
projects…
TODD I
think I can foresee challenges around that at this time. But
we also need to be mindful that as our economy grows, as we
want to export more, we’re going to have to look for ways
to meet the requirements of business and industry. First and
foremost, we look towards Kiwis for that. That’s why the
government has put a huge amount of effort into training,
apprenticeships and so on. But, look, these are
conversations that we should have over time. Putting the
China upgrade aside, Agenda 2030 is about a 10- to 15-year
strategy. It’s directional. We will have an opportunity to
talk about the detail of what agreements should look like as
we go
forth.
CORIN On
the China issue, I mean, the One Belt, One Road strategy,
it’s seen by some as about Chinese influence in the
region, as well. I mean, does that create problems? Because
we are seeing reports in Australia where there is a little
bit of reluctance than New Zealand to, sort of, buy into
that idea because they’re worried about how that might
upset the US. And, I guess, it comes back to that issue. Do
we have to choose sides
here?
TODD No, we
don’t have to choose sides. I think we want to be cautious
and we want to understand any new initiative well before we
make decisions around it. But, no, New Zealand not only
doesn’t have to take sides and discussions of this type. I
don’t think that we should. We should be looking for
economic opportunities that will deliver for New Zealanders
and the New Zealand economy, and wherever there is an
agreement or an opportunity that delivers a greater fairness
for New Zealanders in the US or China, where others will
join us to show leadership internationally on the
discussion/debate around opportunities of trade that can
deliver for our citizens, then New Zealand will look at
that… we’ll welcome that partnership and that
conversation.
CORIN Looking
at your goal, we haven’t had a lot of free trade deals
signed, really, have we, in the last few years. There’s
been a few disappointments. Obviously, TPP, but there’s
also Russia. I don’t know where that’s got to. Is that
completely
dead?
TODD Well,
we’re going to have to work through a bit more process
with Russia. We took a stand insofar as the FTA was
concerned, that while sanctions remained in place around the
world, and whilst Europe, particularly, with Russia, we were
looking at what was happening on their borders, we
wouldn’t go forward with that trade agreement, but we keep
in touch with the Russian
government.
CORIN So
not completely
dead?
TODD I guess
the point here is, you are correct that it takes a long time
to negotiate trade agreements and lots of things can happen
to get in their
way.
CORIN One last
question on TPP In your heart of hearts, do you really think
that this deal can survive; that you can come up with a TPP
minus the U.S., and that we will actually see New Zealand
exporters
benefitting?
TODD I
was pleased two weeks ago when all of the remaining TPP
ministers, including Japan, met in Chile, and we published a
declaration that says we stand behind the benefits of the
agreement. We need a common set of rules in the
Asia-Pacific, and that they are all open to exploring
opportunities for TPP to go forward. It’s too soon to know
what those opportunities, those steps might be, but it’s
also too soon to say that that deal is dead. For New
Zealand, it is imperative that whenever there’s an
opportunity, we’re out pushing for that, and it’s part
of the reason that the P.M.’s told me to travel so
extensively in the first part of this year. I can’t tell
you that there will be something that looks like TPP at the
end of this process, but I can absolutely guarantee New
Zealanders and exporters will put every effort in that we
can because it would still be a common set of rules that
will give us better access and fairer access to a number of
countries. You know, our economy depends upon that type of
work.