International trade may become a source of tension with the election of Donald Trump as US President, according to BusinessNZ.
BusinessNZ CEO Kirk Hope says New Zealand’s prosperity relies on open and free trading of our export products, and if the US takes a more closed approach to trade in future, New Zealand export returns could be affected.
“The US is New Zealand’s third largest export market. Trade with the US earns New Zealand over $5 billion a year in products including meat, dairy and wine, and over $2 billion a year in services. A reduction in this level of trade would make a difference to New Zealand’s growth prospects.
“International trade generally could become more uncertain, as statements made during the Presidential campaign indicated an intention for the US to impose large tariffs on imports into the US from China and Mexico. This raises the possibility of tariff retaliation and a more general increase in protectionism by other countries. The overall result could be a general decrease in international trade. This would not be in New Zealand’s interests, given that we are a highly trade-reliant economy.
“It is possible that statements made during the campaign may prove to have been merely rhetoric, and the US will maintain its orthodox approach to international trade – that will be the hope of business in New Zealand.
“New Zealand business will continue its course of growing high quality innovative exports of goods and services and seeking trade opportunities in all parts of the world.”
Bumpy ride
Meanwhile ExportNZ says Trump winning the US Presidential election signals a bumpy ride for currency markets and a lost opportunity to reduce trade barriers for New Zealand products if the TPPA gets knocked back.
Executive Director Catherine Beard says, “Trump’s anti-trade position and general protectionist stance is concerning. If his intentions to stop US companies from outsourcing overseas and tariff walls eventuate then New Zealand will lose from this.
“The US is an important market for New Zealand. We exported $8.4 billion of goods and services there in 2015. If Trump’s economic policies result in slowing the growth of the US economy, we can expect the demand for New Zealand’s exports to drop too.
“Even though Trump has labelled free trade agreements and the TPPA as “horrible” and “disastrous”, it’s unclear as to exactly what his objections are. Also, it remains to be seen how much these statements were merely political rhetoric.
“We hope that in reality, common sense prevails and there will be a return to a more orthodox position on international affairs. This would include the US taking a leadership role on trade in the TPPA region.”
