Little versus Key on Chinese trade

Andrew Little’s second shot at John Key in Question Time yesterday was short and not very sweet.

TradeSteel Imports

5. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that threats of trade retaliation by China if New Zealand investigates substandard Chinese steel imports are “unsubstantiated rumours”, given his Government has been discussing that threat with China since May?

Rt Hon JOHN KEY (Prime Minister): Yes. Every time the issue of possible retaliatory action against our exports has been raised, New Zealand has sought, and received, assurances from China.

Andrew Little: Was the Government’s decision not to investigate substandard Chinese steel imports connected to trade threats from China, or is that just a coincidence?

Rt Hon JOHN KEY: I am not aware of the decision that the Government has made in regard to that.

Andrew Little: Is it just another coincidence that our kiwifruit exports are now blocked from China after Chinese threats of trade retaliations if we investigate its steel dumping?

Rt Hon JOHN KEY: My understanding is that the issue holding up imports of Zespri kiwifruit into China is a technical matter. It is a technical matter related to some rot that was found on fruit that was imported some weeks earlier. My understanding is that Zespri has voluntarily decided not to export the fruit, because it is going through, now, a pre-examination process that will ensure that when it restarts the exports to China, they are rot-free.

Andrew Little: Why is it acceptable for China to ban New Zealand exports for containing a fungus that poses no health hazard and has been present on our kiwifruit exports to China for years?

Rt Hon JOHN KEY: The member is Leader of the Opposition and, on the basis of that, he has some responsibility at least to get the facts vaguely correct. The fact is that Zespri voluntarily stopped sending exports of kiwifruit to China for about a week. They have not been banned by the Chinese.

Andrew Little: How has he let the relationship with China get to the point where it is allowed to send us shoddy steel but we cannot send it top-quality kiwifruit?

Rt Hon JOHN KEY: The member is just making this stuff up. He does himself a disservice.

 

More from McClay on China trade issue

Trade Minister Todd McClay has now revealed that concerns about possible trade reprisals from China first came to his notice in May, two months before the Government denied any issue.

Stuff: Todd McClay confirms China-NZ talks since May over trade reprisal fears

The New Zealand and Chinese governments were in talks as early as May over fears of trade reprisals, Trade Minister Todd McClay has revealed.

McClay said the “engagement” in late May – long before Zespri passed on a warning from a Chinese commerce official in early July – were at “various levels of Government”.

The July warnings made to Zespri, Fonterra and potentially other primary exporters indicated exports would be slowed down by the imposition of so-called non-tariff barriers.

McClay on Monday told Stuff there were limits to what he could say “given the legislative constraints around the reporting of competition complaints that are not yet under investigation”.

But he said the concerns in May “in broad terms … related to both governments explaining their positions; clarifying legislative and other requirements around trade remedy issues; or seeking assurances in the event of suggestions or rumours of possible trade retaliation”.

He said it was not until July 8 – at least six weeks later – that he was briefed by the New Zealand Embassy in Shanghai on “an industry specific threat”.

When Stuff first broke news of the July 8 threat, passed on by Zespri, it was dismissed by exporters and the Government as an unsubstantiated rumour.

McClay had tried to brush off the issue but later apologised to the Prime Minister.

He also apologised to Prime Minister John Key who publicly reprimanded McClay for not giving broad enough answers and for “dancing on the head of a pin” with what he had said, leaving Key himself to provide false answers to reporters.

Key said McClay had left the impression that the only communication was between Zespri and a non-government organisation “and that’s not true”.

Trade and diplomacy has to be handled carefully in public but McClay too careful, or careless.

Last week Zespri said Chinese authorities had discovered on June 6 a fungus or rot in two containers of its kiwifruit. They had waited until early August to issue a “risk notification” that would have the effect of slowing down the clearance of kiwifruit at the border.

In response Zespri halted shipments to China for a week while it put in place “protocols” to address the issue. Meanwhile it diverted a million trays of fruit to other markets.

While the Chinese reaction matched the reported threat, officials and ministers have described it as a technical issue – reiterated by Key on Monday – and have denied any link to Chinese retaliation saying the timing was coincidental and an issue could have blown up at any time.

Are import issues common? Or is this an out of the ordinary ‘coincidence’?

It’s kinda ironic that one of our big exports to China are derivative varieties of what were known as Chinese gooseberries.