Sunday 16 June, 2013
 
New Zealand needs to lift its game in China, Trade Minister Tim Groser tells TVNZ’s Q+A programme
 
Recent problems in our export trade with China showed New Zealand needs to lift its game, Trade Minister Tim Groser said on TVNZ’s Q+A programme this morning.
 
“Ministers have got a taskforce looking at all the risks across the whole supply chain,” Mr Groser said. “There are things we can do, things we can’t do. And the things that we
can do, we’re going to do them better.”
 
The rapid growth of baby formula exports had prompted the Ministry of Primary Industries to require exporters to register their brands as well as their businesses.
 
“This has exploded out of nowhere, this gold rush mentality,’ Mr Groser said. “They’re not unsafe food, because any product that’s manufactured for domestic sale here or for
export… they still have to meet the same stringent food safety requirements. But there is a lack of control.”
 
The Minister said latest news stories about NZ on this issue have been ‘extremely positive’. But agencies react to the scare stories and “try and correct the ship a little bit”.
 
“I think we’re in reasonable shape, but there is a broader challenge out there, and I think we’ve got to lift our game.”
 
New Zealand needs a “whole government approach”, because the problem was wider than just food safety.
 
“There’s the perception issue, there’s issues around certification, there’s issues around the grey trade going from Hong Kong through to China, there’s issues of false labelling. I
mean, we can’t obviously police this within China, but we can and will work more closely with the Chinese authorities.”
 
“And, look, when you have exports triple in five years, you’ve got to ask yourselves, “Are we running fast enough to keep up with these developments?’ I think the answer is no. We’ve got some more work to do here.”
 
Mr Groser said front line officials in all agencies needed to be Mandarin speakers. “I believe if you can’t speak somebody’s language, you can’t really communicate with them
properly.”
 
 
Q+A
 
CORIN DANN INTERVIEWS TIM GROSER
 
 
CORIN DANN
Minister Groser, thank you very much for joining us. Has, in fact, that relationship with China deteriorated recently?
 
TIM GROSER - Trade Minister
No, I don’t think the relationship’s deteriorated at all. I think the relationship is a genuinely in outstanding form. When you have the Chinese Premier saying to our Prime Minister - I was sitting beside the PM a few months ago - saying the relationship we have with NZ is not only good; it’s the model of the relationship we want to have with developed countries. That is something. But we’re suffering from- I think, in a sense, we’re victims of our own success in terms of the trading aspects and these detailed problems that you’ve just summarised. And, look, when you have exports triple in five years, you’ve got to ask yourselves, ‘Are we running fast enough to keep up with these developments?’ I think the answer is no. We’ve got some more work to do here.
 
CORIN            I mean, I was on that trip to China as well, and there was no doubt about it. I mean, the Chinese were welcoming us with open arms. How, then, do we get a situation where a crucial export like meat gets held up on the border? I mean, it just doesn’t make sense.
 
TIM                 Well, because, in the view of the minister responsible for this, there was a slip-up in terms of certification-
 
CORIN            What about your view?
 
TIM                 Well, that’s also my view. Of course there was a slip-up, and we moved to correct this. Now we’ve passed through an order in council the continuation of the old certificates for the next three years. So, you know, a mistake was made. There will be more mistakes. We don’t have trade disputes with Iceland because we don’t trade with Iceland. The more you trade, the more likely it is that things will go wrong in terms of the detail. But it doesn’t cut across the general point about the overall relationship. It just means we need to invest more in what I call the infrastructure of this relationship.
 
CORIN            I will get to that point about the investment. But on that issue of the meat blockade, there has been suggestions from within the industry and some media suggestions as well that while there might have been a mistake over paperwork, that in fact this was a retaliation because the Chinese were very unhappy about our response to the DCD saga. What’s your response to that?
 
TIM                 I’ve heard the suggestion. I haven’t seen any evidence for it. We’ve just re-established relationships with the key officials not just in Beijing but also in the main ports, and I think that they’re in very good shape. So I’ve heard the theory, but I think, actually, it was a slip-up. But it’s a slip-up that shouldn’t have happened.
 
CORIN            But is it fair to say that they were very upset about our handling of the DCD saga? They didn’t think- And we apologised to them. They didn’t think that we responded properly.
 
TIM                 Well, the DCD saga is a very, very interesting issue. So, that was not a food safety issue. Nobody was saying NZ food is not safe. But it was a perception of safety, and that is very difficult to contain. So we’ve sorted the problem, but I think now ministers have got a taskforce looking at all the risks across the whole supply chain. Because there’s more than just food safety. There’s the perception issue, there’s issues around certification, there’s issues around the grey trade going from Hong Kong through to China, there’s issues of false labelling. I mean, we can’t obviously police this within China, but we can and will work more closely with the Chinese authorities. So, this is a bit of a gold rush mentality at the moment on infant formula. I’m sure you saw that report saying - so much is unbelievable - that there more cases of people being caught for smuggling infant formula between Hong Kong and China than drugs. So, you know, we’re right at the centre of this. There are things we can do, things we can’t do. And the things that we can do, we’re going to do them better.
 
CORIN            I’ll get to that, but just very quickly to finish on this DCD issue, was there any direct correspondence from the Chinese to you about their dissatisfaction with this? Because the suggestion is that we couldn’t recall because that would have been too damaging, and they wanted us to recall.
 
TIM                 Well, not to me personally and not to my trade officials, but to the relevant experts in NZ unquestionably, and that has been sorted. But-
 
CORIN            What do you mean by that? To the relevant experts?
 
TIM                 Well, these are done by technical people in AQSIQ, which is the relevant Chinese authorities and-
 
CORIN            So the Chinese raised concerns?
 
TIM                 Oh, yes, absolutely, and then we worked through those concerns. So what we need to do here is have the best possible relationships right across the different agencies in NZ and in China to handle this, and it’s not just in China. I mean, there’s a broader issue here about Indonesia, about halal certification. We have all sorts of problems going on all the time in these areas too, so it’s a general challenge.
 
CORIN            At the end of the day, it comes back to our brand and protecting our brand and our future, because we’ve got so much relying on it. I mean, we had the Sri Lankans also suggesting that there was radioactivity in milk and these sorts of comments. So controlling these brands is a huge issue, and what seems to be emerging is that we’ve dropped the ball a bit here, and we’re playing catch-up.
 
TIM                 Well, we’ve always had these problems. I remember after Chernobyl, and remember that’s 25 years ago, one of the authorities in a certain country which I won’t name stopped NZ milk powder because they found radiation because the ultra-sensitive equipment can pick this up. We said, ‘Well, hang on. We’re nuclear free. We don’t have any nuclear weapons, nuclear power in our country.’ It was background radiation in the soil-
 
CORIN            Sure. So tell us-
 
TIM                 I’m just making the point this has been going on for at least the past 25 years. It’s accelerating at the moment in China because of the speed of the transformation of our trade-
 
CORIN            So just run us through what you are doing. Because there are, as you say, so many facets of this with the milk smuggling as well. What  are you doing to prevent a major problem here?
 
TIM                 I think what has really been brought home is that you can’t treat this issue simply as a technical issue of food safety alone. That’s the base of it, and we’ve got the best food safety system, I think, in the world, with multiple control points. But what these events showed us is that there are a range of issues across the supply chain going into China, in particular. So we’ve got a range of ministers. We need a whole-government approach, and that’s what we’ve set up, and we’ve got a very extensive analysis now. We’re looking at these risk factors-
 
CORIN            Because if we come back to your infrastructure question, does this mean you’re going to get more resources? Are you going to boost Ministry of Primary Industries because they need more resources?
 
TIM                 I have said to the senior officials, not just in my department but other departments, ‘Look, this government is perfectly prepared to invest more in the HR side of your operations on the basis of a well-argued case.’ And if they put that up, I think they’ll get a very good hearing from ministers.
 
CORIN            Surely they should be getting enough of a message from the Chinese media who are coming here, finding problems, finding issues with our manufacturing of milk powder and reporting it back there. There’s a clear signal that the Chinese aren’t happy with the effort going in from your government.
 
TIM                 Well, that allegation has been made, but equally I’ve been talking to Jian Yang who’s, of course, one of the two Mandarin-speaking MPs we’ve got in Parliament, who said the latest news stories about NZ on this issue have been extremely positive. So we get scare stories, we react, we try and correct the ship a little bit. I think we’re in reasonable shape, but there is a broader challenge out there, and I think we’ve got to lift our game.
 
CORIN            You say in your speech to Fieldays a couple of days ago, ‘How well do we know our customer?’ And you do raise the issue of the DCD and the meat saga as obviously some problems. Surely five years into this relationship, which is so important, we should know them better, shouldn’t we?
 
TIM                 Yes, we should know. Absolutely. So, I see it like this. We’ve got, first of all, the formal platforms that people like me and others before me have negotiated. And they’re essential to get access to these new emerging markets. But they’re just pieces of paper. After that, you need relationships. Now, I think our two key agencies, the Ministry of Foreign Affairs and the NZTE, are quite well resourced. I think there’s about 130 NZ officials now living and working in China for the government. But I’m asking other agencies to reflect carefully on their own long-term strategies.
 
CORIN            Is it a case of we don’t have enough Mandarin speakers, we don’t have enough people, the expertise to deal with this relationship?
 
TIM                 Well, my view is that all agencies should be waking up, smelling the roses or whatever the phrase is. You know where we’re going. China is going to be hugely important to NZ’s future. I think they need Mandarin speakers. They need to come, in my view, to the same conclusion that the Ministry of Foreign Affairs came to-
 
CORIN            So does that flow right through, just for example, to universities and schools?
 
TIM                 I would have thought so. Absolutely. I mean, I’m a complete almost extremist on this issue. I believe if you can’t speak somebody’s language, you can’t really communicate with them properly. So I really believe in New Zealanders who are exposed to the front line, whether they’re in different agencies, whether they’re in different companies, taking that skill.
 
CORIN            Let’s just deal with it quickly before we finish on this issue of the smuggling of milk powder. It seems to be getting out of control. Your ministry- Not your ministry, but the Ministry of Primary Industries essentially can’t say who’s doing this and what’s going on in this industry, both the legitimate and the illegitimate.
 
TIM                 Well, first of all, there are two different issues here. One is the export from NZ, and the other is what’s going on in Hong Kong. We’re never going to be able to control that.
 
CORIN            Why not?
 
TIM                 Because we’re not the Hong Kong authorities.
 
CORIN            But why can’t we stop going off our supermarkets?
 
TIM                 We are doing it within our own borders. So from the 20th of June, this Thursday, all NZ companies, because this has exploded out of nowhere, this gold rush mentality, they will have to register themselves. I have to say this - even though those exports are going out through multiple channels, they’re not unsafe food, because any product that’s manufactured for domestic sale here or for export, they still have to meet the same stringent food safety requirements. But there is a lack of control-
 
CORIN            But not the Chinese requirements, though, is it?
 
TIM                 Yes, and that’s exactly the point. So we’ve moved on that, and I think from next Thursday onwards, we’ll have a tighter enforcement system in place.
 
CORIN            Trade Minister Tim Groser, thank you very much for your time.
 
TIM                 Thank you.

ENDS

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