Latest / The SME Stream / Todd McClay: Trade Minister on the free trade agreement struck with the nations in the Gulf Cooperation Council

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Todd McClay: Trade Minister on the free trade agreement struck with the nations in the Gulf Cooperation Council · The SME Stream

• 0:00
  Speaker 1: I'm always happy to report good news for the economy.
• 0:02
  Speaker 1: Today it's another trade deal, this time the Golf Cooperation Council.
• 0:04
  Speaker 1: That's a grouping of six Arab states. You got bar
• 0:06
  Speaker 1: raing q Eight, Aman, Qatar, Saudi Arabia and the UAE.
• 0:10
  Speaker 1: The deal being described as the best the GCC has
• 0:13
  Speaker 1: done yet from Doha. Trade Minister Tom McLay Morning, make
• 0:16
  Speaker 1: good morning, described as an eighteen year long ambition. Why
• 0:20
  Speaker 1: has it taken so long?
• 0:22
  Speaker 2: Well, look, it's been a range of things.
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  Speaker 3: You might remember that many years ago we got quite
• 0:27
  Speaker 3: close and then there was an issue with Saudi Arabia
• 0:30
  Speaker 3: around live sheep exports. I was able to re engage
• 0:34
  Speaker 3: with the GCC ministers in February of this year. I've
• 0:37
  Speaker 3: had seven this is my seventh visit up here and
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  Speaker 3: I'm just very very pleased that we've been able to
• 0:42
  Speaker 3: land this deal.
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  Speaker 2: It's really good for our exporters.
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  Speaker 3: It's one of the highest quality deals the GCC has
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  Speaker 3: ever done.
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  Speaker 1: So they would be what you would call and I
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  Speaker 1: reference once again the UK Deal true free traders.
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  Speaker 2: Yeah, well, yes and no.
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  Speaker 3: In as far as our agreement is concerned, we have
• 1:01
  Speaker 3: ninety nine percent of our exports will be tariff free
• 1:03
  Speaker 3: over ten years when we add the UAE deal to it,
• 1:07
  Speaker 3: which we did a month ago, about fifty percent on
• 1:11
  Speaker 3: day one on entry into force.
• 1:13
  Speaker 2: So in that respect, yes, But.
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  Speaker 3: If you look at all the other trade deals have
• 1:16
  Speaker 3: done and have done a few now, they're much lower
• 1:19
  Speaker 3: levels of ambition. So one of the things we've been
• 1:21
  Speaker 3: able to do during the course of the last seven
• 1:23
  Speaker 3: months has raised that level of ambition and demonstrate to
• 1:26
  Speaker 3: them that, you know, getting rid of these tariffs, even
• 1:29
  Speaker 3: over time, will be good for both sides. And I'll
• 1:32
  Speaker 3: tell you what they're most interested in us now because
• 1:34
  Speaker 3: that issue of the live cheap exports is gone. It's finished,
• 1:38
  Speaker 3: it wasn't raised, there's nothing in the agreement about that,
• 1:41
  Speaker 3: so no commitments, nothing at all.
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  Speaker 2: What they really are after now is to be able
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  Speaker 2: to you.
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  Speaker 3: Know, feed their own citizens and a growing tourism industry
• 1:49
  Speaker 3: with high quality save food. And I reckon that's why
• 1:51
  Speaker 3: we the cracket. They have a lot of interest in that.
• 1:53
  Speaker 3: You know that from New Zealand.
• 1:54
  Speaker 1: Is there a bit of a theme. I don't know
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  Speaker 1: if you've caught up on this because you're traveling the world,
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  Speaker 1: but Shane Jones came back from Singapore. What Singapore interested
• 2:00
  Speaker 1: in is food security. Is food security for a country
• 2:04
  Speaker 1: like us, the go to play.
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  Speaker 3: It is now post COVID, Yes absolutely, and when if
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  Speaker 3: you look at the world at the moment, you know
• 2:13
  Speaker 3: with all the uncertainty and geopolitics, it is and food
• 2:17
  Speaker 3: security is two things. It's safe food because even if
• 2:20
  Speaker 3: you have food, if you're not sure it's safe for
• 2:22
  Speaker 3: your citizens to consume, you know, it's.
• 2:25
  Speaker 2: Not the same.
• 2:26
  Speaker 3: And then making sure we have enough of it. And
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  Speaker 3: certainly the conversations I've had with the various countries and
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  Speaker 3: all six of the trade ministers from these countries today
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  Speaker 3: here when we are initial, you know, the end of
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  Speaker 3: negotiation is their desire to have long term, sustainable relationships
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  Speaker 3: where when they need the food, we will supply it
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  Speaker 3: to them.
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  Speaker 2: And that's something we said we'll work through.
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  Speaker 3: But the first step is to get those tariffs out
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  Speaker 3: of the way, get some certainty. So in New Zealand
• 2:53
  Speaker 3: as can invest time and effort into you know, this
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  Speaker 3: trade relationship.
• 2:56
  Speaker 1: What's the growth path on this deal? Because if you
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  Speaker 1: look at the GCC, it's made up of a bunch
• 3:00
  Speaker 1: of countries including the UAE, but we've got a separate
• 3:03
  Speaker 1: UAE deal. The big money seems to be with the
• 3:06
  Speaker 1: UAE in Saudi Arabia.
• 3:09
  Speaker 2: Yeah, that's right.
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  Speaker 3: We sell there's about three billion dollars worth a two
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  Speaker 3: way trade.
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  Speaker 2: We sell them two point six billion every year.
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  Speaker 3: Of that therere is about one point seven billion, and
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  Speaker 3: red meat about two hundred and sixty million. Their terrif
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  Speaker 3: rates are not high, but you know, it's a very
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  Speaker 3: competitive market.
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  Speaker 2: So even getting them.
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  Speaker 3: To zero gives us a competitive advantage. But this deal,
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  Speaker 3: as with the UE is about how much more we
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  Speaker 3: can trade with them, not what we're doing now. And look,
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  Speaker 3: I suspect that over the next four or five years
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  Speaker 3: we'll see that two and a half billion dollars with
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  Speaker 3: exports jump significantly.
• 3:46
  Speaker 2: The very very big lamb meters.
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  Speaker 3: We don't sell them a lot of lamb, but they
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  Speaker 3: will start buying it from us. So for our sheep
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  Speaker 3: farmers are doing it hard. It's a real opportunity here.
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  Speaker 3: The other thing that I think is very important. We've
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  Speaker 3: got a lot of a liberalization of services. So if
• 4:02
  Speaker 3: you think about Saudi Arabia, they're investing trillions of dollars
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  Speaker 3: into infrastructure. They are building their country We already have
• 4:09
  Speaker 3: engineering firms and others up here from New Zealand. They
• 4:14
  Speaker 3: now have greater rights under this agreement, and I think
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  Speaker 3: we'll see our services trade grow significantly at the same
• 4:20
  Speaker 3: time as we sell them more food and fiber.
• 4:22
  Speaker 1: Quick word on India story here yesterday. They're changing the
• 4:26
  Speaker 1: way they engage with the world. They're not interested in
• 4:28
  Speaker 1: small countries. They want to do the big play. Is
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  Speaker 1: that a problem for us or not?
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  Speaker 2: Well, no, it's not.
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  Speaker 3: We're putting a lot of effort into that relationship and
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  Speaker 3: you know, again have had six or seven visits and
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  Speaker 3: it's building.
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  Speaker 2: We're starting to sell more.
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  Speaker 3: And two directions, the Indian President visited New Zealand and
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  Speaker 3: at the same time, you know, there's an invitation from
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  Speaker 3: Prime Minister Modi for Prime Minister.
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  Speaker 2: Lux And to visit as well.
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  Speaker 3: I think what that signaling is they do want to
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  Speaker 3: do deals with larger countries because they haven't got any
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  Speaker 3: of those. They haven't got the EU, they haven't got
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  Speaker 3: the UK, they haven't got the US, they haven't got China.
• 5:02
  Speaker 3: But in my engagement with them, there are other reasons
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  Speaker 3: that they are interested in New Zealand, and some of
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  Speaker 3: that is the innovation and technology we have around agriculture,
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  Speaker 3: so I'm still very optimistic there.
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  Speaker 2: That is all.
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  Speaker 3: We've always said that relationship over the last six years
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  Speaker 3: of the Labor government was underdone and we have to invest
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  Speaker 3: in it first before we get close to.
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  Speaker 2: A trade arrangement. I'll have another trip up to India
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  Speaker 2: before the end of the year.
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  Speaker 3: I'm just going to keep putting the effort in because
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  Speaker 3: if we don't, we know what we get, which is nothing.
• 5:29
  Speaker 1: Good on you have a good weekend, Appreciate it. From
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  Speaker 1: Dohan Todd McLay, the Trade Ministry