New Zealand’s regional and bilateral trading relationships will continue to strengthen against the backdrop of the worsening US-China trade war, Finance Minister Nicola Willis says, as small countries such as hers adjust to a new reality and hold fast to priorities including fighting climate change.
NZ was keenly aware of rising geopolitical and economic risks, Willis said in an interview on Thursday, but her discussions at the annual meetings of the International Monetary Fund and World Bank showed the enduring strength of the international institutions and trade deals among other countries.
NZ has strong trading ties under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a free trade deal between 11 member countries including Australia, Canada, Japan and Britain, she said, with the European Union having also expressed interest in linking up.
A separate trade deal with the United Arab Emirates was also promising, she said.
“All of those trade relationships are very strong, and the message that we’re having from our partners is that they wish to continue to build on them and expand them, rather than go the other way,” she told Reuters.
“We … are cautious and nervous about anyone backsliding on agreements, but we’re not seeing signs of that happening.”
IMF and global trade officials this week highlighted uncertainty and risks linked to a new escalation in the US-China trade war, but pointed to continued resilience in global trade, noting that only three countries – the US, China and Canada – had jacked up tariff rates in recent months, with some 72 per cent of trade flows still adhering to existing rules.
Willis said NZ also remained committed to its emission reduction commitments under the Paris climate accord, and did not expect US President Donald Trump’s withdrawal of the US from the agreement to derail her country’s efforts.
“We consider the risk and threat of more extreme climatic events as something that we need to prepare for and adapt to, both for ourselves, but particularly for our Pacific family, small island states who are particularly vulnerable to significant climatic events,” Willis said.
She said consumers around the world, including in the US, would continue to be interested in the emissions profile of countries such as NZ, creating a commercial and trade imperative for continued climate action.
Existing trade agreements, such as NZ’s trade deal with the EU, also required continued adherence to climate commitments, Willis said.
“There are a number of bilateral agreements like that in the world where countries have committed to each other that they will continue climate action. And I’m certainly seeing those commitments continued by many nations.”
NZ also remained a partner in the Five Eyes group, along with Britain, Canada, the US and Australia, Willis said, and was increasing its defence spending along with others amid rising geo-strategic pressures and fragility.
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