Will the Trump administration's policies see fewer goods sail into Ports of Auckland?
Will the Trump administration's policies see fewer goods sail into Ports of Auckland?
New Zealand exporters are worried by the prospect of trade protectionism and isolationism that a Donald Trump presidency could entail, say industry insiders.
Exporters are anxiously waiting to see whether Trump's rhetoric during the campaign translates into policy, or whether his stance softens now that he has the top job.
Prime Minister John Key yesterday all but confirmed that the Trans Pacific Partnership (TPP) would be a casualty of Trump's victory.
The markets help keep governments honest and I'm sure there will be a lot of policy advice given to the incoming president to take sensible approaches to things, so let's hope that common sense prevails.
Markets are unsure whether Trump will remain committed to his more extreme trade policies, including his pledge to leave the World Trade Organisation (WTO), withdraw from the North American Free Trade Agreement and impose significant tariffs on Chinese goods.
NZ Institute of Economic Research's John Ballingall said all signs pointed to a trading environment that was less encouraging for Kiwi exporters.
"Certainly the ones I've spoken to are concerned about it, coming off the back of Brexit as well," Ballingall said.
"Both of these decisions do point to a period of instability in global markets and to a global economy where trade liberalisation certainly won't be top of the agenda."
However, he said NZ's exporters were pragmatic and had prepared as best they could for this eventuality.
"I think the key message for businesses is just to hold on tight for the short-term and ride it through. But after that it's really the longer term of what Trump's trade policy will mean for New Zealand's exporters that's the main concern."
Our agricultural industries would likely be those most affected.
With US economic growth likely to slow and Americans earning less, NZ's tourism sector could also be hit.
ManufacturingNZ and ExportNZ executive director Catherine Beard said the best-case scenario for NZ exporters would be that Trump's anti-trade views mellowed and Republican pro-trade factions prevailed.
Make no mistake, [Trump] has the power to do a lot of the things he wants to do if he's minded to.
"The markets help keep governments honest and I'm sure there will be a lot of policy advice given to the incoming president to take sensible approaches to things, so let's hope that common sense prevails," Beard said.
The worst-case scenario would be the advent of an international trade war, she said.
"That's if they put up big barriers, China retaliates and everybody starts to become protectionist around the world. And we know from history that's not good for economies."
Business consultant Stephen Jacobi, who was a major proponent of the TPP, said he was "very disappointed" that the agreement now seemed destined to fail.
"That said I think the issues behind TPP - better market access, better rules for trade and investment, the need to incentivise supply chains to boost global growth - all of those things are still going to have to be addressed in some way by the new president, we just don't know how yet," Jacobi said.
"Make no mistake, [Trump] has the power to do a lot of the things he wants to do if he's minded to. He could raise tariffs on Chinese goods, he could depart from the WTO. All of these things are very uncertain and complicated for New Zealand."
