What exporters want from PM’s chat with Biden

Confirmation that Prime Minister Jacinda Ardern will wrap up her United States tour with a formal sit-down with President Joe Biden is welcome news for New Zealand exporters.

Despite a Covid-affected programme, the visit has provided a valuable opportunity to focus that momentary spotlight on New Zealand in a market that is large, significant, and critical to our country’s post-pandemic economic recovery.

The White House invitation is the cherry on top.

We should take this opportunity to again put on the agenda a number of concerns that weaken the trade infrastructure our exporters rely on, especially as a small trading nation and a strong supporter of the rules-based trading system.

As was revealed in our recent independently commissioned research, the relationship we share with the United States is mature, diverse, innovative and increasingly transformative.

There is a great story to tell about New Zealand innovation, technology, creativity and sustainability, trade with the

US growing at over 5% a year for the last 15 years, and the companies behind this growth that are leading the way.

Our prime minister enjoys a global reputation, which positions her as one of our best assets in the telling of that story.

Through her US media appearances, including the Harvard commencement speech, Ardern has made it clear that New Zealand is again open for business, which is crucial for encouraging tourists, investors and skilled workers to board an Air New Zealand flight to our shores to help begin the much-needed restoration of our tourism, hospitality and export education sectors, and our workforce.

But it is in the high-level political discussions where the prime minister has an opportunity to advance New Zealand’s position on a few of the tougher outstanding issues on the trade front – including US steel and aluminium tariffs, the weakening of the World Trade Organisation (WTO) dispute system, and finding a way forward for a comprehensive free trade platform.

That New Zealand – a US friend and a strong security and defence partner – still remains subject to steel and aluminium tariffs on national security grounds is not right.

This remains a hangover from the previous administration, and needs to be resolved.

These tariffs are of dubious merit, and certainly misdirected. As a matter of principle, New Zealand should at least be exempted, joining other US friends and partners such as Australia and Japan.

Secondly, core to the effective operation of the global rules-based trading system has been, until very

recently at least, the WTO dispute settlement process.

The process, and specifically the appeals mechanism, fell over when the Trump Administration blocked appointments to the Appellate Body. This means that the ability for WTO members to enforce WTO obligations is severely weakened.

As a small trading nation, we rely on this ability to ensure that other, often much larger and more powerful, nations meet their obligations. A constructive pathway forward is required to get the appeal mechanism working again.

Lastly, while the prospects of the US entering a comprehensive free trade agreement, whether the

CPTPP or something else, any time soon seem remote, the case for deeper US trade and economic engagement should continue to be made.

Our part of the world needs an engaged and constructive US trade presence leading a positive trade narrative on the benefits of an open, global rules-based trading system that is inclusive and sustainable, works for small and medium-sized businesses, protects workers, and creates shared prosperity.

These are benefits for US businesses, exporters, citizens and consumers, too.

As it currently stands, President Biden’s proposed Indo-Pacific Economic Framework, while new and innovative and definitely a positive sign of US regional economic engagement, only meets part of this brief.

It may yet evolve, and New Zealand should be at the table and part of the process, but the ultimate goal must remain US engagement in a comprehensive regional trade pact.

The good news is that the relationship New Zealand shares with the US across all areas, including the trade and economic relationship, is strong and robust, where differences in views can be constructively raised without repercussions.

The prime minister’s trip to the US gives us the chance to not only profile New Zealand, but also ensure that the often taken for granted foundations, such as an effectively operating global rules-based trading system, remain solid and continue to provide benefits for decades to come.