Bilateral relations between New Zealand and the United States have taken some cautious steps forward, with the resumption of a trade dialogue and business visa access for Kiwis moving closer to reality.
Officials from the two countries met in Washington DC late last week as part of the Trade and Investment Framework Agreement (TIFA).
A formal statement from the US Trade Representative’s office said the two countries had agreed to “a programme of expanded cooperation on issues of shared interest”, including the exchange of information about unfair trade practices.
Demian Smith, the US Embassy’s counselor for political and economic affairs, told Newsroom the resumption of TIFA talks showed the will for “forward movement” on trade between the two sides.
“This didn’t necessarily have to happen, it’s not the kind of thing that immediately springs back to life, it takes interest and motivation on both sides…
“We’re so closely aligned, we see the world similarly when it comes to trade, we have similar standards of what we think countries should stick to and we have similar export-led growth.”
Filling the TPP ‘void’
Smith said the TIFA process had existed since the early 2000s, but had not been used in recent years as the two countries instead focused on TPP negotiations.
The talks filled a “void” left by the US withdrawal from the multilateral deal, and re-established a formal process for future talks.
While recent US trade moves, such as implementing steel tariffs against its partners and attacking China, have led to concerns about a trade war, Smith said the country was committed to the international rules-based order.
However, the US has come under criticism for blocking new appointments to the WTO’s appellate body, a move which could render it dysfunctional before the end of the year.
While Smith conceded New Zealand was “using different words” to the US on the issue, he argued they both supported the same goal of fixing the WTO process.
“We shouldn’t hyperventilate right now. The processes are still functional: yes, there are some looming changes and some potential escalation but we work through these things with the current set of facts in mind.”
“The appellate body process became so drawn out that it was essentially becoming an escape chute for countries that did not want to face the results of the findings.”
While it was possible the appeal process could run into problems down the line, the US had not abandoned the process and wanted to work within WTO processes.
“We shouldn’t hyperventilate right now. The processes are still functional: yes, there are some looming changes and some potential escalation but we work through these things with the current set of facts in mind.”
Smith said it was too early to say whether the resumption of trade talks could lead to an FTA between New Zealand and the US, but it could not hurt the cause.
“What the last few decades tell us is trade is hard, trade takes a long time, particularly formal bilateral trade agreements…I can say we don’t get to an FTA some day without something like an active, forward-looking TIFA process which is what we now have.”
KIWI Act close to taking flight
Further signs of progress came on Tuesday, when the US House of Representatives passed the KIWI Act.
The Knowledgeable Innovators and Worthy Investors Act, as it is known in full, would give New Zealand citizens access to E-1 and E-2 business visas, allowing those with “substantial” investments inside the US to enter and work multiple times for two years.
The legislation passed the US Senate on June 28, meaning a flourish of US President Donald Trump’s pen is all that is needed for visa access to become a reality.
Gaining access to E-1 and E-2 visas has been a long-running goal for New Zealand: a senior MFAT official cited the significance of visa access as justification for hiring a US lobbying firm against initial advice.
Acting Prime Minister Winston Peters said the bill’s progress showed the Government was “making serious progress with our American friends in terms of our future relationships”.
“It’s a big step forward and we’re very pleased and grateful to those senators and congressmen who supported it and backed it for us.”
“E visas are a big deal: we’ve seen countries that have been made eligible for it and that’s led to some really huge opportunities coming through of a huge benefit to both economies.”
Peters downplayed a suggestion that the move represented a mending of the NZ-US relationship, saying: “Well, we’ve always had good relationships for the last 12 years.”
The Government now had to wait to see whether Trump would sign the bill into law by August 8, he said.
Smith said the US Embassy was watching the progress of the legislation “with close interest”, given the benefits it could have for New Zealand.
“E visas are a big deal: we’ve seen countries that have been made eligible for it and that’s led to some really huge opportunities coming through of a huge benefit to both economies.”
