David Parker is taking large and small business to China with him, he tells Fran O'Sullivan.
Trade and Export Growth Minister David Parker will seek to strengthen business ties when he leads a delegation to Guangzhou and Beijing later this month.
Parker will take with him high-level representatives from some companies who would have accompanied Prime Minister Jacinda Ardern on her own mission, which was curtailed in the wake of the Christchurch terrorist attack.
"They won't all be the biggest businesses," says Parker. "It's important to demonstrate to New Zealanders the benefits of trade flowing through to all the parts of the economy, including small businesses."
Parker last year touched base with New Zealand companies invested in China when he attended the inaugural International Import Expo Enterprise & Business Exhibition in Shanghai. Following Guangzhou, he will head to Beijing to attend the second Belt and Road forum.
The Coalition Government has yet to determine its stance on the Belt and Road Initiative.
"New Zealand signed a non-binding memorandum agreement in 2017, so we're going to the forum to learn more about the Belt and Road Initiative and how it might work as an arrangement to benefit New Zealand and Australia," he says.
"We're in discussions with them on implementation at the moment, including developing a work plan based on information-sharing that enables China and New Zealand to find together what mutual beneficial cooperation will look like under the agreement. That's a work in progress."
This is a testing time for small countries like New Zealand as two big elephants of global trade — China and the United States — jostle for advantage.
"Foreign affairs theory says there are two choices," says Parker. "You either pick a side and align yourself to one side, or, you try to chart yourself through the middle according to your principles.
"If you do it in a way that isn't according to your principles you'll be buffeted by the power of those on either side of these controversies.
"The moment that we allow those things to be politicised at the behest of one or other of those partners is when we create difficulties for ourselves because we're creating leverage on other difficult issues for the future."
Parker stresses that is why New Zealand's processes in respect of security issues and tariffs are deliberately outsourced from the Executive to arms of government "who've got clear sets of transparent rules they're expected to apply without fear or favour according to the rule of that law."
China is obviously a fundamentally important trading partner for New Zealand with two-way trade reaching $30 billion for the first time in the year ending December 2018. During that period New Zealand exports increased by 15 per cent to $14b and services were up 12 per cent to $3.5b.
Parker is not troubled by recent reports that some exporters had faced problems at the Chinese border. "In our view primary products are and always have been clearing the border as normal," he says. "There were those assertions to the contrary recently which we didn't accept and still don't."
Free trade deal upgrade
Work is now being intensified on the upgrade of the bilateral free trade agreement between China and New Zealand. Parker notes there are areas where the relationship can be enhanced and costs reduced for exporters.
The upgrade was on the agenda for the working meeting between Prime Minister Jacinda Ardern and Premier Li Keqiang in Beijing on Monday. Dairy is no longer a priority. Parker points out in three to five years' time all of the tariffs on NZ's exports to China will be eliminated under provisions in the 2008 agreement.
"By 2024, New Zealand will have the best access to dairy products of any country in the world. I'm not expecting this upgrade to change that."
Digital trade and e-commerce is a "pretty substantial issue" which will be addressed in the upgrade. Services are also a priority, he adds.
He instances behind-the-border regulatory issues will also be addressed along with some goods export matters.
Matters like phyto-sanitary standards systems — critical to a food exporting nation like New Zealand — which link to the standards for product sold electronically.
World Trade Organisation
Both New Zealand and China respect the importance of the multilateral trading organisation. Parker notes China has launched negotiations at the WTO to establish global e-commerce trade rules — which he sees as an example of how countries are co-operating in the face of blockages.
He points out New Zealand is endeavouring to embed the concept of plurilateralism in trade agreements to ensure they are open to new participants who meet the standards, rather than a "closed club for those that are in at the start."
He says New Zealand benefits when there is free and fair trade that enables each country to pursue points of comparative advantage. "To the extent that rigidities are created through rigid trade rules, we don't think that's in New Zealand's interest in terms of our participation in those global value trades.
"We don't think it's the world's interest because the world economy performs worse and that is also to the disadvantage of New Zealand."
China is New Zealand's
● #1 Trading partner
● #1 Export market
● #1 Source of imports
China is New Zealand's largest trading partner. In 2018, we traded $3.6 billion more with China than with our next-closest partner, Australia.
China accounts for 18 per cent of New Zealand's total trade compared with Australia (16 per cent).
In 2018, total exports to China grew 15 per cent to $13.9b.
Opportunities for bilateral business
China Business Summit — May 6, Auckland
"Navigating choppy waters"is the theme of the fifth China Business Summit to be held in Auckland on Monday May 6.
Trade Minister David Parker will highlight New Zealand's developing trade strategy with China, new opportunities for bilateral business and provide a "report back" on insights from his mission to China.
The Summit will have a strong focus on changing geo-strategic dynamics impacting New Zealand business together with evolving opportunities for bilateral business between New Zealand and China.
These new opportunities will include a focus on how technology advances and the expanded use of AI will affect bilateral business.
China remains New Zealand's greatest potential trading partner but economic pressures internally and trade pressures externally mean we need to respond differently than we have in the past.
The China Business Summit will provide a unique business and political perspective of what success with China may look like tomorrow, and set the agenda for discussion on the vital game changers in the China market.
To register interest, go to www.aucklandchamber.co.nz
Import Expo — Nov 5-10, Shanghai
NZ companies are being encouraged to attend China's biggest international business expo so they can better tap into the fast-growing two-way trade between the two countries.
The International Import Expo Enterprise & Business Exhibition will be held at the National Convention & Exhibition Centre in Shanghai from November 5-10.
"The 2019 Expo in Shanghai is an unmissable event for New Zealand businesses seeking new opportunities and to build on existing relationships in China," says Bank of China (NZ) chief executive David Wang, who also chairs the Chinese Chamber of Commerce in NZ.
To register interest contact the Chinese Chamber of Commerce in New Zealand before April 30, 2019 (Contact: Michael Shang Email: firstname.lastname@example.org Tel:09-9809039)