New Zealand must seize the opportunities presented by Donald Trump’s global trade war, Prof Robert Patman says.
The University of Otago international relations specialist says standing up for our principles is dangerous but necessary. On the flipside, that approach is likely to present opportunities to expand exports, he says.
‘‘It is dangerous because our two biggest trade partners are now engaged in a trade war, China and the United States,’’ Prof Patman tells Global Insight.
‘‘[But] we could open the door to new trade deals.’’
Trump’s partial midweek turnaround - granting a 90-day reprieve to nations hit with more than a 10% tariff (excluding China, Canada and Mexico) - is still estimated by the World Trade Organisation to cause a long-term reduction in global real GDP of nearly 7%.
Prof Patman says New Zealand needs to stand up for free trade ‘‘vigorously’’ and not accept Trump’s attempts to establish a new trade system based, not on multilateral rules, but on American primacy.
‘‘Most countries still believe that free trade is the most rational way for countries to conduct their economic business. It is a win-win situation.’’
While resisting Trump’s vision, New Zealand must also speed up efforts to diversify economic links, he says.
‘‘By standing firm on free trade and politely disagreeing with the United States, we could open the door to new trade deals, which of course would be in sync with our attempt to diversify and make us less reliant on these two giants who are engaged in a trade war.’’
In this episode of Global Insight, Prof Patman also discusses New Zealand’s decision to double its defence spending and the significance of a high-level cross party New Zealand delegation to Pacific Island leaders.
