China has wasted no time in seizing the opportunity presented to it by the United States' withdrawal from world trade leadership. Seldom has New Zealand seen a diplomatic mission deliver a more impressive tray of gifts than those brought by China's Premier Li Keqiang on his state visit this week.
Talks on upgrading our free trade agreement will begin in four weeks. Chilled meat has been granted access on a six-month trial to a market we have been permitted to supply with only lower-value frozen product. A multimillion-dollar biotech joint venture will allow cancer therapies under trial in China to be developed under a western regulatory environment here. Tourism from China will be further boosted with additional flights, new visa rules and easier movement through New Zealand airports. There is even talk of investment in New Zealand infrastructure.
None of these is really a gift, including the last. They will bring business for both countries as trade normally does. Leadership of world trade liberalisation requires convincing Governments the mutual benefit is worth the political cost of reducing domestic protections over the objections of well-entrenched industrial lobbies. It is easier to convince small countries that can see the attractions of access to much larger markets than it is to persuade the Governments of those larger markets.
Nobody in the Trans-Pacific Partnership negotiations had any illusions the Obama Administration joined that effort primarily for a geopolitical purpose since it excluded China. Sadly that fact was unknown to Donald Trump when he told his presidential campaign rallies the TPP was too generous to China. But facts would probably not have changed his mind.
Nobody dealing with China will have any illusions that its interest in trade agreements is primarily geopolitical too. The inward focus of "America First", not just in economic policy but in alliance commitments and military bases, opens the possibility for China to become the dominant power in the Asia-Pacific hemisphere. It knows its reception in the smaller economies of the region could be greatly enhanced if it picks up the baton dropped by the US and lends its weight to a comprehensive set of fair rules governing international commerce and investment.
