Govt concentrates efforts on seeking – and supplying – clarity on US-NZ trade position.
Trade Minister Todd McClay is “not taking anything off the table” in response to United States President Donald Trump’s 10% tariffs – although a legal challenge is not an immediate priority.
A lobbyist representing NZ’s largest exporters has called on the government to consider taking a case against the US to the World Trade Organisation.
Stephen Jacobi of the International Business Forum, which represents Fonterra, Silver Fern Farms, ANZCO and Zespri, among other primary sector heavyweights, said he believes Trump’s tariffs violate commitments made by the US during global trade negotiations in the 1990s.
The Uruguay round of talks created a quota for NZ to export up to 213,402 tonnes of beef to the US tariff free. Smaller quotas for butter and cheese were also negotiated.
Jacobi said there is a “strong case” to mount a legal challenge to “uphold what we have left of the international trading system”, even if it risks Trump retaliating with even higher tariffs against NZ exports.
McClay agreed it is important countries carry out obligations in trade agreements but said it is too soon to consider a legal challenge.
He said he has not asked for advice from officials on the merits of a case but he is talking to exporters about the impacts of the tariffs on their businesses.
“For a lot of them the product they have sent since the new regime has been in place has not even arrived.
“We need a lot more information to see what the new rules mean or if they are to be changed before we consider anything else, which is why we are not considering any retaliatory action at this stage.
“We are not taking anything off the table but we are not doing anything at this time.”
Asked whether he thought the 10% tariff on NZ exports could be negotiated lower, McClay said he expects he will know more after an APEC trade ministers’ meeting next month, when he is scheduled to meet US Trade Representative Jamieson Greer.
“There seems to be a feeling building that 10% is the new floor and the lowest they will go but there has been no clear indication,” McClay said.
McClay wrote to Greer earlier this month to correct the claim made during Trump’s April 2 “Liberation Day” announcement that US exports to NZ face 20% tariffs. McClay said the average tariff by NZ on US imports is 1.9%.
“It was important to clarify that for them and to others around the world that might have read that and thought NZ does not have one of the lowest tariff regimes in the world when in fact it does.”
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