With Brexit looming, Boris Johnson is keen to rekindle trade relationships with Britain’s traditional partners – but for New Zealand, pragmatism must rule over sentiment, says Peter Dunne.
Shortly after taking office last week as Britain’s Prime Minister Boris Johnson opined that New Zealand was “at or near” the head of the queue when it came to his government’s plans for bilateral free trade agreements once they enter their new post Brexit world, which he vows will be by October 31 this year, come what may.
For an unashamed Churchillian Empire nostalgist like Johnson, rekindling the old trade relationships with traditional partners like New Zealand, Australia, Canada and perhaps South Africa makes perfect sense, along with similar agreements with Atlantic Charter partner, the United States, and new economic power-house and former imperial colony, India.
Establishing a network of free trade agreements with old friends not only starts to look like a global partnership of like-minded nations trading and working together with a cohesion similar to the European Union, but also, as a series of bilateral trade agreements, keeps the focus more sharply on securing and protecting Britain’s interests and place in the world.
The sovereignty issues that formed such a major part of the Brexit campaign would be unlikely to emerge in this series of bilateral agreements.
For Britain, that would be an obvious win-win situation. Not only would it secure tariff free access to a number of diverse markets, and rekindle some old relationships along the way, but it would also strongly buffer the British economy against the adverse shocks of leaving the European trading bloc. And it would be good politics for Johnson as well, calming as it would some of the more anxious nerves at home about what the full impact of Brexit will be.
But while there may be compelling reasons for Britain to move early to seek a free trade agreement with New Zealand, the incentives are nowhere near the same or as pressing for New Zealand to rush to reciprocate.
We have been negotiating our own free trade agreement with the European Union for a while now and finalising that is a far greater priority than negotiating a separate agreement with Britain at this stage.
The European Union (excluding Britain) is presently our third major trading partner, currently buying nearly $8 billion dollars of our annual exports and exposing us to a potential market of almost 450 million people. Britain, by contrast accounts for $2.7 billion of our exports, for a market of 65 million.
The irony of Britain now seeking to renew free trade agreements with those it spurned so thoroughly a couple of generations ago is palpable, and, if we are come to Britain’s assistance once again, then this time it should be on our terms.
Over the years, as we have adjusted to the impacts on our economy of Britain’s original entry into Europe in 1973, New Zealand has become well known and respected in the European environment, meaning that the opportunities for a viable free trade agreement are realistic and too good to ignore. Moreover, there would be beneficial gains for both sides in such an agreement, whereas without wider political guarantees, a free trade agreement with Britain has a more lop-sided look about it.
Appeals to shared heritage and Commonwealth background will obviously be made to promote a United Kingdom/ New Zealand free trade agreement, but they should hold as little weight now as they did for Britain when it unceremoniously dumped the likes of Australia and New Zealand in pursuit of entry into Europe in the 1960s and 1970s.
For many, the painful economic and social adjustments New Zealand endured in the 1970s and 1980s as it reorganised its economy in the wake of no longer being Britain’s farm will linger long in the memory, as will the indignity of the time when we had to go through the “Aliens” queue at London Heathrow, while all the time being lauded as it suited as Commonwealth kith and kin. The irony of Britain now seeking to renew free trade agreements with those it spurned so thoroughly a couple of generations ago is palpable, and, if we are come to Britain’s assistance once again, then this time it should be on our terms.
At the very least, we should hold off any negotiations with Britain until we have finalised, and have in place, a working agreement with the European Union. And, even then, we should wait until the current and likely ongoing political turmoil in Britain has settled down. The last thing we should be doing is seeking to negotiate any form of agreement until matters such as whether Scotland stays in the Union, and the status of the Irish border have been resolved, and while the rest of the United Kingdom seems as hopelessly divided as it appears today.
In any case, by the time all this happens, Johnson may no longer be Prime Minister, and the British enthusiasm for a free trade agreement may have waned again.
But, in the event all these preconditions can be met, and negotiations do get underway, here are some things New Zealand might like to consider as key outcomes to seek.
At the very least, New Zealand should seek that its citizens have the same rights of entry and access to employment as European Union citizens currently enjoy in Britain. Reciprocal rights would naturally apply in New Zealand. Similar opportunities should be sought in respect of mutual access to goods and services, education and health in particular.
The extent to which Britain would be prepared to accede to such proposals, no different to those it has already acceded to in respect of the European Union would be a clear indication of whether Britain is keen to revive old relationships, or is looking merely to a quick fix to get it out of the post-Brexit dilemma. Assisting with the latter should not be the priority it would have been for earlier generations, in the days when helping the so-called Mother Country rated highly. If Britain’s original entry to Europe taught us one thing it should have been the value of pursuing our national self-interest, and not being trapped by the vagaries of sentiment.
Of course, New Zealand should seek to pursue its strong historical ties with Britain in the wake of Brexit – familial and other links mean it will almost impossible not to – but, burned as we were by the experience of 1973, we should always make sure that protecting and promoting our national interests are paramount.
We have learned the hard way that pragmatism rules over sentiment, which is why, right now, a free trade agreement with the European Union is more important than getting Britain out of the mess it has got itself into over Brexit.