NZ First plans with Russia puts EU trade at risk

A trade concern has emerged out of the coalition agreement between Labour and NZ First that could potentially put future trade opportunities with the European Union at risk.

NZH:  Winston Peters’ plans to reopen trade with Russia raises alarm from Europe

KEY POINTS:

  • Buried detail in Labour-NZ First coalition agreement calls for thawing of relations with Russia, on ice since invasion of Crimea and Ukraine.
  • EU Ambassador critical of move to break ranks on sanctions and warns of consequences for EU-NZ free trade negotiations.
  • Commentators say pursuing policy of warmer relations with Russia would position New Zealand alongside Trump administration.
  • Winston understood to have met several times with Russian ambassador over the past year.

New Zealand First’s plans to reopen trade negotiations with Russia have sparked the new Government’s first international crisis.

The unheralded policy this week drew an unusually forthright and undiplomatic rebuke from European Union ambassador Bernard Savage.

At a briefing on Tuesday in Wellington, Savage said any moves made towards thawing relations with Russia would be viewed in a “very negative” light.

The policy, written into the Labour-New Zealand First coalition agreement at the urging of the smaller party, risks harming relations with one of our largest trading partners in order to enhance those with one of our smallest.

According to 2016 figures the European Union is our third-largest trading partner with a total of $20 billion in imports and exports each year, while two-way trade with Russia currently amounts to only $417 million.

Savages told those attending that reactivating the stalled Russia deal – suspended since 2014 – would complicate New Zealand’s efforts later this year to secure a free trade deal with the EU.

This will take some careful managing by the Government. It is complicated by split responsibilities between Labour (David Parker as Minister of Trade) and NZ First (Winston Peters as Minister of Foreign Affairs.

This is on top of conflicting aims between Labour and the Greens on the Trans Pacific Partnership.

33 Comments

  1. David

     /  November 5, 2017

    Given that NZ First voters have given up referendums on smacking and Maori seats and a whole list of other bottom lines that no doubt persuaded their vote this is a bloody odd thing for someone who hates trade deals to slot in.
    Even more odd that Labour agreed to it which suggests it must be hugely important to Peters and that murky why question is one we wont get a satisfactory answer too but its always fun watching Peters bluster.

    • It’s not odd at all that Labour likes it; think of the politics of Russia.

      • David

         /  November 5, 2017

        I cant see a single similarity.

        • Are you serious ???

          • David

             /  November 5, 2017

            Yes, seriously give me one thing you think Putins Russia and Arderns NZ have in common.

            • Kitty Catkin

               /  November 5, 2017

              I didn’t say that they had anything in common, I was referring to ideology. Think of the high-handed way in which people’s land and homes will be taken from them to build houses for other people.

        • Kitty Catkin

           /  November 5, 2017

          There are plenty of books about politics or you can look online for a potted version. I haven’t the time or inclination to give a lecture on beginners’ politics.

          • Gezza

             /  November 5, 2017

            Points deducted for abruptness & complete failure to even attempt to back up a bald assertion.

      • 12% flat tax rate? If only!

        • The trouble is that the money has to come from somewhere. One either pays it oneself or has an eye-watering tax rate as they do in Scandinavia. Or takes the middle way. My health tax is nowhere near what I am costing-I’d rather pay and not get in this case, of course. I don’t mind that I haven’t needed an ambulance for a while so that my St John sub can go to someone else’s costs for that.

  2. This is so Washington. “Several” meetings with Ambassador…at least TRUMP never did that personally and now Mr No when it’s Yes has set in motion something so potentially disastrous as to hamper important relationships to foster the ambition of a despot and madman.

    Please somebody do some forensic accounting here; it’s not as if it’d be the first time he’ll be called out for policy for pecuniary advantage.

    • Gezza

       /  November 5, 2017

      • Shivering in my boots as to what a sop of an old pensioner could do to me……..

        • PS. Not talking about you Gezza.
          😂😂😂😂

          • Gezza

             /  November 5, 2017

            I should bloody well hope so. Not the proud owner of a Gold Card yet!
            3 more years, then it’s on the train every 3rd day just for the hell of it!
            👴🏼 👍🏼 🎸

    • If Auntie Winnie believes that there is pecuniary advantage in this senario, he must be mad. How can anyone believe that 417 million is more than 20 billion ?

  3. Blazer

     /  November 5, 2017

    the U.S can lean on the E.U if necessary.They provide the defence shield for Europe anyway.

    • artcroft

       /  November 5, 2017

      Sure. Congress, which has just sanctioned Russia 419 votes to 3, is gonna lean on the E.U to let NZ reestablish trade with Russia. #when pigs fly

  4. david in aus

     /  November 5, 2017

    Too bad the FBI’s Robert Mueller can’t look into this.
    How do we get into a situation where a trade agreement that is against the national interest become a part of a coalition government agreement?

    • Blazer

       /  November 5, 2017

      its not against the national interest at all…its against the wishes of some EU countries who feel threatened by Russia.

      • david in aus

         /  November 5, 2017

        It’s against the national interest. It jepardises negotiations with the EU which is the largest trading entity in the world.
        It’s like saying trading with North Korea, where there is international sanctions is not against NZ’s interests.
        Russia is a pariah nation. There are sanctions against from our largest trading partners and like-minding countries.
        I wonder if the Kremlin funded bloggers will be in force with topic.

        • Blazer

           /  November 5, 2017

          WHY IS Russia a pariah nation?

          • Human rights record, possibly ?

            I am in favour of being on good terms with other countries, but to exchange billions-even modern billions which are 1/1000 of real billions-for millions seems a poor exchange.

          • David

             /  November 5, 2017

            Annexing Crimea, shooting down a passenger jet, backing Assad,s genocidal regime, offing unfriendly journalists, locking up potential political opponents. Pretty much everything you rail against.

  5. artcroft

     /  November 5, 2017

    No wonder Bill English has decided to stay on as leader of the opposition. Its got to be the easiest job in politics.

  6. Fight4NZ

     /  November 5, 2017

    Extremely difficult to see an upside, unless it is bluff to prompt greater cooperation from EU? They do run one of the great protectionist markets. But it doesn’t seem very likely.

  7. Missy

     /  November 8, 2017

    This is the EU trying to bully a non-member country. They should have no say over who NZ does FTA’s with, nor should they have any say with what order NZ negotiates. The EU are so used to bullying their member states that they are starting to think they can bully non-member states too.

    A couple of things need to be looked at, first what portion of our current EU trade is in fact with the UK? This could be significant if much of it goes to the UK and not continental Europe, second, exactly how long will it take to complete the Russia deal? I would suggest less than half the time for the EU deal. Currently EU trade deals are taking on average 7-10 years to complete and a further 1-2 years to take effect – several signed years ago are still not in effect. Third, NZ needs to look at exactly what they want included in the FTA, this will be big as it will potentially dictate where the issues will arise within the EU, especially with the Veto. Fourth, assuming it takes the average of 7-10 years for NZ to negotiate a FTA with the EU what are the odds the EU will still be around? It is fast speeding towards self-destruction, perhaps faster than many of use figured unless things change.

    Whilst a FTA with the EU would be great, we cannot risk other agreements on the hope of one that hasn’t even started negotiations, with an organisation that has a history of protectionism and bullying.

    What I see in this is the EU trying to flex its muscle with a perceived smaller nation, the EU will be on the back foot when the UK leave, they will be short of money and running a trade deficit with the UK, which will impact them severely if the UK leave with no trade deal. The EU are showing cracks and they look to be an organisation under pressure.

    • Alan Wilkinson

       /  November 8, 2017

      Bugger. Winnie looked good in nailing the EU to their wailing wall. Got to give the old devil his due.