McClay optimistic on US FTA after DC visit

Trade Minister Todd McClay is optimistic about an FTA with the United States. Photo: Lynn Grieveson.

Trade Minister Todd McClay says a bilateral free trade agreement between New Zealand and the United States is up for grabs - but has warned not to expect a result any time soon.

McClay has wrapped up a trip to Washington DC, speaking positively about his discussions with Commerce Secretary Wilbur Ross, new US Trade Representative Robert Lighthizer, and other political representatives and businesspeople.

“The trading relationship is strong, and it's very good shape,and that's important for us to underline.”

Ross had told him the US was open to a bilateral FTA with New Zealand “when the time is right” - a positive sign, although one which McClay said would take some time to come to fruition.

“Look that’s going to be a few years away, they're going to have a lot on the negotiating agenda, including some of the world’s largest economies, but I think that’s quite positive...

"For them to raise it in they way they did suggests to me there is some thinking going into what they do after they get through the NAFTAs and so on.”

McClay said he and Ross had agreed that the two countries would sit down and talk if they developed any particular ideas for what an FTA would look like.

“That in itself I think is positive for us because it gives us something to work towards, and means that clearly they’re comfortable with the trading relationship we have at the moment.”

He also gave the US politicians an update on the progress of the TPP11 deal, but did not believe the country was likely to rejoin talks in the near future.

“I don’t think we should expect to see them back to the TPP table any time soon, but in the meantime we have a constructive relationship with them, and the door’s open to us to continue to talk about the importance of trade and global trading.”

With Ross saying last month that the US was open to resuming negotiations on the TTIP trade deal with the EU, McClay believed the Trump administration was “going to show leadership on trade” as it developed its policy.

“What we’re seeing as more and more people are added in the trade part of administration, they’re able to consider the trade strategy in greater detail.

“We’ve got to be careful that we don’t expect too much from an administration in the very early days…when President Obama first came to office, he didn't do anything in the trade agenda for the first two years.”

The US and New Zealand are both investigating allegations of Chinese steel dumping in their domestic markets, and McClay said Ross had asked him about whether we were looking at the issue.

“All I was able to say to him is that it’s an official-led process and the ministry [MBIE] have responsibility for that and the New Zealand government’s position is our law is very clear that there’s an investigation and there will be a finding.

“It’s very clear though that they are quite focused on a number of industries in the US, and steel is one of them. He didn’t elaborate too much on what their thinking is there but it’s obvious to me that they’re putting a lot of thought into the steel sector, both production, exports and imports to the US.”

While his schedule was disrupted by the tragic shooting at a Congressional baseball practice, McClay said New Zealand was highly thought of amongst the politicians and business people he was able to meet.

“There’s a really good appreciation of New Zealand - we’re thought of and we’re remembered, it’s much much more than Hobbit movies which is good.”

While exports to the world’s largest consumer economy reached $8 billion last year, McClay said there was a chance “we could well only be scratching the surface”.