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Todd McClay: Trade Minister on being one step closer to signing a trade agreement with Switzerland · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk Z'B. Follow
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  Speaker 2: Now New Zealand might be one step closer to signing
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  Speaker 2: a trade agreement with Switzerland. This is off the back
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  Speaker 2: of the big trade discussions happening in Auckland today. Top
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  Speaker 2: McLay is the Trade Minister.
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  Speaker 3: High Todd, Hey, Heather, how are you.
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  Speaker 2: I'm very well, thank you. But is dairy off the table?
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  Speaker 3: Is it? Well? Now we have a start in negotiating,
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  Speaker 3: although we do know that dairy is a challenge for
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  Speaker 3: Switzerland because they have a lot of subsidy. But what
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  Speaker 3: we've agreed today is to start a formal trade and
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  Speaker 3: investment dialogue. Officials will meet in September and start scoping
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  Speaker 3: out what a trade agreement could look like and whils
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  Speaker 3: there's no commitment on either side. I do think that
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  Speaker 3: we're like mine that and during the course of next
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  Speaker 3: year we could launch the negotiations and then will get
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  Speaker 3: around the negotiation table. But this is a very very
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  Speaker 3: wealthy European nation that actually can consume a lot of
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  Speaker 3: a lot of what New Zealand producers and for New
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  Speaker 3: Zealand companies up in the EU taking advantage of our
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  Speaker 3: current trade a deal. It's a very short step across
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  Speaker 3: the border.
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  Speaker 2: Get given the fact that they have said it's probably
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  Speaker 2: not going to happen and we're not going to have
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  Speaker 2: greater access, I mean we can probably we probably shouldn't
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  Speaker 2: pin our hopes on it, should we.
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  Speaker 3: Well look at actually, if you look at the dairy
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  Speaker 3: products they consume, they're they're quite high value, so they're
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  Speaker 3: not the milk, powders and stuff that we often sell.
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  Speaker 3: They've just done a trade deal with the UK and
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  Speaker 3: there is dairy in that. It's a very high value
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  Speaker 3: cheese and some other things. Yeah, even some chocolates. So look,
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  Speaker 3: we're not we're having started negotiations. We wouldn't do it
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  Speaker 3: through the media, but as with everything, we'd be going
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  Speaker 3: in to get the very best.
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  Speaker 2: Okay, what do you think they are going to buy.
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  Speaker 3: A million people that is one of the wealthiest in
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  Speaker 3: the world. Is that you know, it's a big opportunity
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  Speaker 3: for New Zealand.
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  Speaker 2: Apart from the high end dairy products, what do you
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  Speaker 2: reckon they'll want from us?
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  Speaker 3: Well, well, there are many things actually, you know, we
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  Speaker 3: look that we might produce meat and so on. But
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  Speaker 3: putting that aside, a lot of it for us would
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  Speaker 3: be around the services trade. You know, some of the
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  Speaker 3: things that we do very well, the innovation, the science,
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  Speaker 3: our service exports are doing well around the world, and
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  Speaker 3: this is a market that can consume that very very well.
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  Speaker 3: In turn, if you look on the other side, there's
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  Speaker 3: a lot that they do big and investing around the world.
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  Speaker 3: They are wealthy, and we'd love to bring more of
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  Speaker 3: their investment down here. They're also very big pharmaceutical manufacturers.
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  Speaker 3: So you know, this is not a game changer for
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  Speaker 3: New Zealand, but it's another piece of the puzzle of
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  Speaker 3: giving Kiwik's access to a market of wealthy people so
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  Speaker 3: that they can keep producing and selling and rebuilding the economy.
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  Speaker 2: Okay, now, the US tariff, are you expecting it to
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  Speaker 2: go up to twelve and a half percent overnight?
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  Speaker 3: I don't know whether it's overnight, but it is likely
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  Speaker 3: to be over the next week. Whether you'll remember that
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  Speaker 3: when we went to fifteen percent, the US courts found
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  Speaker 3: that that was illegal in all countries of the world.
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  Speaker 3: The US put in place a ten percent for one
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  Speaker 3: hundred and fifty days as they work through a process.
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  Speaker 3: We were told, and you know, we spoke about it
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  Speaker 3: publicly a month or so ago, that we were likely
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  Speaker 3: to go back to twelve and a half percent, that
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  Speaker 3: one hundred and fifty days is about to run out.
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  Speaker 3: And so yes, I do expect that's likely to happen.
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  Speaker 3: We don't have an indication if the President has decided
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  Speaker 3: countries in the world are going higher than that. And
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  Speaker 3: whilst it means that we're two and a half percent
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  Speaker 3: lower than last time around, you know, when it is
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  Speaker 3: harmful for trade, and it does mean that US consumers
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  Speaker 3: will pay more for what New Zealand is producing because
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  Speaker 3: we know they're still buying from US.
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  Speaker 2: Yeah. Is it actually having an impact on businesses here,
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  Speaker 2: all of this up and down down the tariffs.
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  Speaker 3: So for some smaller businesses who've been reliant upon the
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  Speaker 3: US market, it is very very hard for them. But
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  Speaker 3: for the majority of our exporters, their volumes or values
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  Speaker 3: have not been going down. I mean, over the last year,
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  Speaker 3: even with this changing tariff rates, we've sold them by
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  Speaker 3: value about four percent more. We've increased what we're selling them.
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  Speaker 3: But it is the uncertainty that it's making very hard
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  Speaker 3: for our businesses. You know, it was twelve percent, fifteen percent,
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  Speaker 3: ten percent, you know, twelve and a half. Who knows
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  Speaker 3: what will be in the future. I think that's why
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  Speaker 3: you're seeing New Zealand exporters looking in markets elsewhere Europe.
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  Speaker 3: We were doing China, We're going back to and doing
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  Speaker 3: a lot, you know, a lot of interest in India.
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  Speaker 3: So there are opportunities still out there even though we
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  Speaker 3: are still selling more to the US with this unusual
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  Speaker 3: changing nature of President Trump's trade decision making Todd.
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  Speaker 2: Listen, thanks very much for talking us through it. Really
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  Speaker 2: appreciate it. Enjoy week in. Todd McLay, Trade Minister. By
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  Speaker 2: the way, sorry for the quality of the liner. Kept
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  Speaker 2: on dropping in and out.
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