Latest / The SME Stream / Damien O'Connor: Labour's Trade Spokesperson on the impact of Trump's re-election on New Zealand trade and exports

Transcript

Damien O'Connor: Labour's Trade Spokesperson on the impact of Trump's re-election on New Zealand trade and exports · The SME Stream

• 0:00
  Speaker 1: What will the re election of Trump mean for New
• 0:04
  Speaker 1: Zealand and more specifically New Zealand exporters. Damian O'Connor, as
• 0:11
  Speaker 1: Labour's trades spokesperson, David Parker, was Trade Minister under the
• 0:18
  Speaker 1: Trump administration. Damen was under the Biden administration and he
• 0:23
  Speaker 1: joins me now a very good morning.
• 0:25
  Speaker 2: To you, Cura Kerry Kilder.
• 0:29
  Speaker 1: It looked like whoever was elected though they understood the
• 0:33
  Speaker 1: appeal of promoting US made US manufacturing industry, trying to
• 0:40
  Speaker 1: reinvigorate it, or at least saying they were trying to
• 0:43
  Speaker 1: do so. How hard is it going to be to
• 0:47
  Speaker 1: get a deal now for our exporters?
• 0:53
  Speaker 2: Well, look, yes, we are moving in a tour more
• 0:56
  Speaker 2: protection as world across the globe that in particular in
• 0:59
  Speaker 2: the US. Donald Trump pulled out of the TPP which
• 1:02
  Speaker 2: was been negotiated in twenty seventeen. CPTPP progressed very valuable
• 1:08
  Speaker 2: trade agreement. The US is not there, you know. Since then,
• 1:12
  Speaker 2: we have been actually growing a significant trade volumes and
• 1:16
  Speaker 2: value with the US and now our second biggest market
• 1:19
  Speaker 2: in some areas, third and the other fourteen and a
• 1:22
  Speaker 2: half billion dollars worth of trade which is significant. That's
• 1:26
  Speaker 2: just exports. We don't have a free trade agreement with them,
• 1:30
  Speaker 2: so this has occurred in the absence of a free
• 1:33
  Speaker 2: trade agreement. Now, while things are good, that just trucks
• 1:37
  Speaker 2: along quite well. We pay a bit of tariffs, but
• 1:39
  Speaker 2: New Zealanders still have profitable trade. But when something goes awry,
• 1:44
  Speaker 2: we have no protection whatsoever. So the US slapped on
• 1:49
  Speaker 2: tariffs on our alban and steel. Other than go along
• 1:53
  Speaker 2: and ask nicely, there was no ability for us to
• 1:55
  Speaker 2: legally challenge that. That's the exposure that we have, So
• 2:00
  Speaker 2: any terriff that President Trump puts on, we simply have
• 2:04
  Speaker 2: to live with them. Yeah.
• 2:06
  Speaker 1: I was talking to the head of Beef and Lamb
• 2:10
  Speaker 1: the other day saying, look, you know, this trade deal
• 2:13
  Speaker 1: with the UAE has got to be good for beef
• 2:17
  Speaker 1: and lamb farmers because they're looking at lamb. She said, ah,
• 2:20
  Speaker 1: we're just looking to the election and seeing what happens
• 2:22
  Speaker 1: next before we start to rebuild our herds and our flocks.
• 2:29
  Speaker 2: Yeah. Well, I mean the US I think the second
• 2:31
  Speaker 2: biggest market for beef, and for some slices of that
• 2:35
  Speaker 2: beef market, the biggest manufacturing beef which goes into a
• 2:38
  Speaker 2: lot of the mints and the burghers, and we have
• 2:41
  Speaker 2: this high quality pasture fed lean beef that they love,
• 2:47
  Speaker 2: so very significant for us. We don't know what he
• 2:51
  Speaker 2: might do in those areas of primary experts, but you know,
• 2:55
  Speaker 2: indications are that he will step into protect their farmers,
• 3:00
  Speaker 2: their prime and producers with some kind of tariff. And
• 3:04
  Speaker 2: you know, we may be able to trade through that,
• 3:07
  Speaker 2: that is, pay the tariff and still make a profit,
• 3:10
  Speaker 2: but that will come straight off the bottom line, and
• 3:13
  Speaker 2: for the consumers in the US, that will cost them more.
• 3:15
  Speaker 2: That's something that I think the US voters didn't quite understand.
• 3:19
  Speaker 1: Yeah, I mean, I know that the world markets are
• 3:23
  Speaker 1: looking to New Zealand and other other markets for food security,
• 3:27
  Speaker 1: as in abundance of food and also the quality of
• 3:30
  Speaker 1: the food. And we do have a very good marketing
• 3:36
  Speaker 1: around the quality of our food, which may see those
• 3:40
  Speaker 1: in the position to do so pay a bit extra.
• 3:43
  Speaker 2: Look, we fill the gaps around the world. Our total
• 3:46
  Speaker 2: percentage of world food production is a drop in the bucket,
• 3:52
  Speaker 2: but we trade quite a bit of what we produce,
• 3:54
  Speaker 2: and so two and a half percent of total world
• 3:57
  Speaker 2: dairy production. But we're the single biggest trader of dairy
• 4:01
  Speaker 2: product that goes to fill the gaps from time to
• 4:03
  Speaker 2: time as it is needed. So we produce a reliable,
• 4:07
  Speaker 2: high quality product. But we're going to be able to
• 4:10
  Speaker 2: make a profit at those sale prices, and there's no
• 4:13
  Speaker 2: subsidies here, so we've got to get enough from the
• 4:15
  Speaker 2: market to bring back to the farmers to ensure that
• 4:18
  Speaker 2: they make a profit. That's where it gets quite tricky.
• 4:21
  Speaker 2: So any tariffs come off the bottom line that is,
• 4:24
  Speaker 2: there's less money to pay back to farmers.
• 4:27
  Speaker 1: Yeah, and it's interesting, isn't it, because it's going to
• 4:30
  Speaker 1: be easier to recommission a decommissioned factory than it is
• 4:36
  Speaker 1: to persuade US farmers to build up their stock again.
• 4:40
  Speaker 1: But farming speaks to the identity of a country too,
• 4:47
  Speaker 1: you know where those countries have a strong like That's
• 4:50
  Speaker 1: why the UK, I suppose, is given its farmers protection
• 4:54
  Speaker 1: for so long.
• 4:56
  Speaker 2: I mean those countries, the US to a lesser extent,
• 5:00
  Speaker 2: Europe and the UK, they've gone through periods of starvation
• 5:03
  Speaker 2: because they haven't had enough food produced. Now the US,
• 5:06
  Speaker 2: like New Zealand, produces a huge amount of food, so
• 5:09
  Speaker 2: food security is not the issue for US. It's more
• 5:12
  Speaker 2: around affordability. A distribution of food is not fair, and
• 5:16
  Speaker 2: we've got to address that. We only produce enough food
• 5:18
  Speaker 2: for s say, for about forty million people, right, which
• 5:21
  Speaker 2: is but we do have technologies and we work to
• 5:23
  Speaker 2: fill the gaps as I said before, and assist with
• 5:26
  Speaker 2: the food production systems. Look the US in terms of
• 5:29
  Speaker 2: some of its dairy production, it's more efficient than we are.
• 5:32
  Speaker 2: You know, they look three times a day. They've got
• 5:34
  Speaker 2: massive grain production that comes into the dairy, so they
• 5:38
  Speaker 2: can produce it in volume. But we've got to aim
• 5:41
  Speaker 2: for those high quality pasture fed markets. So you know,
• 5:45
  Speaker 2: us finding the niche opportunities to get the value returns
• 5:50
  Speaker 2: is important. But when you look at the US and
• 5:52
  Speaker 2: what the results of the election might deliver, it will
• 5:55
  Speaker 2: be tougher markets around the world because if the tariffs
• 5:58
  Speaker 2: are slapped on in the US, then other people who
• 6:01
  Speaker 2: are exporting dairy and you know South America, Ireland, Europe
• 6:05
  Speaker 2: a big exporter, they will simply shift their product to
• 6:08
  Speaker 2: the other markets as well, where we will be competing
• 6:10
  Speaker 2: and we may end up having to compete on price.
• 6:13
  Speaker 2: So these tariffs will not help anyone across the globe,
• 6:17
  Speaker 2: including you know the very people in the US who
• 6:20
  Speaker 2: they think it's designed to help.
• 6:23
  Speaker 1: How much is bluster, how much is just electioneering just
• 6:29
  Speaker 1: getting into office.
• 6:33
  Speaker 2: We don't know. I think we'll be holding ours on that.
• 6:37
  Speaker 2: You know. The reality is that there was so much misinformation,
• 6:41
  Speaker 2: so many ridiculous statements promise, and it's hard to know
• 6:46
  Speaker 2: what we'll finally be sifted out from this process. Clearly,
• 6:51
  Speaker 2: the Republicans have got the Senate, got the House, and
• 6:54
  Speaker 2: had the president, so there won't be too many handbreaks
• 6:56
  Speaker 2: on some policies which you know, may help Americans or
• 7:01
  Speaker 2: some of them may help the world, who knows. I
• 7:04
  Speaker 2: think this has created a huge uncertainty across the globe,
• 7:07
  Speaker 2: and at this early stage it's too hard to say
• 7:10
  Speaker 2: what it will mean.
• 7:11
  Speaker 1: For us in terms of being able to crack a market,
• 7:15
  Speaker 1: you know, without any help whatsoever. Fourteen billion dollars worth.
• 7:19
  Speaker 1: That's quite an achievement. But is it only going to
• 7:23
  Speaker 1: those privileged people who can afford to pay extra for
• 7:27
  Speaker 1: equality products?
• 7:29
  Speaker 2: Well, I mean in terms of the manufacturing beef, which
• 7:32
  Speaker 2: is a big part of the goods market. You know,
• 7:34
  Speaker 2: that's going into hamburgers, So I guess they see value
• 7:38
  Speaker 2: in going into that segment of the market, but it's
• 7:42
  Speaker 2: still at a price that gives us a return. I mean,
• 7:45
  Speaker 2: we consider it. It's at the lower end of the
• 7:47
  Speaker 2: value segment of beef, but it's still good enough to
• 7:52
  Speaker 2: make us plenty of money and shift the volume. So
• 7:54
  Speaker 2: we've got to cold cows. We have a lot of balls,
• 7:57
  Speaker 2: We have a lot of animals that aren't the premier
• 8:00
  Speaker 2: and state producers that we might expect to eat in
• 8:02
  Speaker 2: New Zealand, but it's still high quality protein. We have
• 8:07
  Speaker 2: done a great job to build up that market. But
• 8:09
  Speaker 2: you know the services area, that is the tourism sector,
• 8:12
  Speaker 2: which has had really strong growth about thirty percent in
• 8:15
  Speaker 2: the last twelve months. You know, we're exporting technology, this's
• 8:19
  Speaker 2: aviation research and devent all those other areas that may
• 8:23
  Speaker 2: be impacted by tariffs as well. We simply don't know.
• 8:27
  Speaker 1: We live in interesting times. Damien, Thank you very much
• 8:30
  Speaker 1: for your time. Damien O'Connor Labor Trade Sperksperson. He was
• 8:34
  Speaker 1: Trade Minister under the Biden administration.