At first blush, Foreign Minister Winston Peters' talk of a free-trade agreement (FTA) with North Korea sounds — as National's Paula Bennett put it — insane.

Peters' NZ First opposed the Singapore, China and South Korea FTAs, and the 2016 edition of the Trans-Pacific Partnership. North Korea has GDP of just US$17 billion ($24b), no more than Gabon.

Talking about North Korea also risked casting a shadow over his and Prime Minister Jacinda Ardern's highly successful visits to the UK, Europe, NATO and Singapore, just as international concern about New Zealand's position on Russia had abated.

Put on the spot, Trade Minister David Parker implied Peters was joking. More tactfully, Ardern said it was more Peters emphasising New Zealand's global free-trade ambitions.


The Prime Minister is right to maintain a never-say-never position: the most important outcome of her trip to Europe was progressing the proposed FTA with the EU, which means New Zealand is in practice seeking an FTA with Bulgaria and perhaps even Albania if its application to join the EU succeeds. Who would have believed it before 1989?

But this still raises the question of why Peters had North Korea top of mind and why it was one of the first countries he mentioned when re-appointed as Foreign Minister six months ago.

The best explanation is the relationship Peters built with North Korea's leadership when he was Foreign Minister in Helen Clark's third term. Back then, Peters acted as something of an intermediary between then US Secretary of State Condoleezza Rice and the North Korean regime.

Something similar was suggested by the Americans at the East Asia Summit in November, when Peters first met US Secretary of State Rex Tillerson, since fired by Donald Trump.

The North Koreans don't receive many foreign visitors, especially ones with links to the US, and Peters' 2007 visit is still remembered in Pyongyang. With the exception of the late Supreme Leader, Kim Jong-il, Peters was given access to most of North Korea's top political leadership and senior officials.

Despite or perhaps because of the occasional minister being executed on the orders of new Supreme Leader Kim Jong-un — along with fake stories of them being fed alive to dogs — North Korea's leadership is fairly stable. Many of those Peters met in 2007 are still in their roles, including the head of state, Kim Yong-nam.

The North Koreans don't receive many foreign visitors, especially ones with links to the US, and Winston Peters' 2007 visit is still remembered in Pyongyang. Picture / Nick Reed
The North Koreans don't receive many foreign visitors, especially ones with links to the US, and Winston Peters' 2007 visit is still remembered in Pyongyang. Picture / Nick Reed

Peters thinks it is possible North Korea's relationships with the rest of the world will one day be normalised. With the recent Winter Olympics diplomacy, the CIA Director and incoming Secretary of State Mike Pompeo secretly meeting Kim in Pyongyang four weeks ago and the Trump-Kim summit expected shortly, that could be sooner than expected.

If the experience of China in the 1980s and Eastern Europe in the 1990s is any guide, massive amounts of investment would flow into North Korea, creating double-digit GDP growth. Pyongyang would be a wild-west boomtown for the most entrepreneurial. There would be enormous opportunities for New Zealand businesses, particularly in agriculture and fishing.

Tough UN sanctions backed by the threat of imprisonment under New Zealand law mean only a handful of New Zealand businesspeople currently have any links with North Korea.

One of the few is Ross Meurant, who was Peters' part-time agriculture, forestry, fishing and racing adviser from 1999 to 2004, when he resigned after it was revealed he was also working for Simunovich Fisheries and Barine Developments who were involved in the scampi inquiry.

Such old-fashioned prudishness about conflicts of interest is almost quaint in today's environment where lobbyists and consultants with outside clients work at the very core of government, including in Ardern's office.

Meurant, whose work in North Korea involves marine science, is no longer so close to Peters, although he is seeking his support for taxpayer funding to send a kapa haka group to Pyongyang.

If something ever does come from Peters' work to help normalise North Korea's relationship with the rest of the world, Meurant will be well-placed to help other New Zealand businesspeople make their first approaches to the hermit kingdom.

Peters' musings about an FTA with North Korea are therefore more explicable than Bennett suggested.

With his existing links to the regime, Peters could put New Zealand at the front of the queue for an FTA should North Korea integrate with the global economy. Nevertheless, we might still be best to get the FTAs with the EU, UK and possibly India and the Commonwealth out of the way first.