Todd McClay, trade, and the spectre of Trump
The PM says he'll work with whoever wins the White House, but the trade minister has previously expressed concern over higher tariffs.
Mōrena, and welcome to The Bulletin for Tuesday, November 5.
In today’s edition: Document reveals “risk” of allowing force against children at boot camps, top health official criticises evidence over tax cut for tobacco products, and our Travel Week content continues. But first, what could this week’s US election mean for trade?
A busy minister
Todd McClay was the man of the moment at yesterday’s post-cabinet press conference, despite the scheduled announcement being about education. The trade minister earned a special mention from the prime minister, who congratulated him on successfully ending trade talks with the wealthy Gulf Co-operation Council, before finding time to launch a new charter for hunting and fishing and then jetting off to China this week.
McClay, reportd BusinessDesk’s Riley Kennedy (paywalled), will have visited 30 countries by the end of the year. He’s currently leading a business delegation to Shanghai to attend an international import expo and says it’s about flying the flag for New Zealand. That’s been the ongoing message since the coalition government took office, with Christopher Luxon telling an audience in Auckland last month that he had spent “much of this year on the road [overseas] making the case for New Zealand as a destination for capital investment and as a trusted partner for security and trade”.
What could the US election change
The big unknown in the talk of trade could become a little less murky as soon as tomorrow night when the outcome of the US presidential election might be known.
A Donald Trump win could see tariffs raised on imports, potentially by 20%. While Christopher Luxon has opted to remain pretty agnostic on what a second Trump term could mean for New Zealand, McClay has previously expressed concern over the tariff threat. He told Farmer’s Weekly earlier in the year that the proposal would be “very harmful”, describing tariffs as “very blunt” and not necessarily good for a domestic economy due to the possibility of increased living costs. “In many cases it lessens choice and puts prices up for consumers,” McClay said.
The Economist (paywalled) claimed that Trump’s “vision for tariffs… would turn the clock back nearly a century on economic strategy”, while Waikato University’s Alexander Gillespie told the Waikato Times that, without a free trade deal with the US, New Zealand risked being “thrown around like a buoy in a storm”. But Newsroom’s Jonathan Milne, reporting on a new paper by the NZ Institute of Economic Research, said that a Kamala Harris presidency could also result in increased tariffs and a tougher trade environment. The Biden administration added tariffs on top of those implemented by Trump, with the institute saying: “The chances of a Democrat/Harris administration doubling down and increasing tariffs are high.” Either way, the next days and weeks are going to be nerve-wracking for those with skin in the game.
Luxon hedging his bets
In an interview with RNZ’s Guyon Espiner yesterday, Luxon said he would be able to work with whatever leader the United States chooses this week. Asked specifically if he could work with Trump, Luxon added: “I’ll find a way”. At his post-cabinet press conference, reported the Herald’s Claire Trevett, Luxon wouldn’t comment directly on Trump’s threat of higher tariffs, though acknowledged there was little chance either way of securing a free trade deal with the United States. “I appreciate there’s a lot of policies being proposed by both candidates ... my commitment is we will work very positively with whoever the American people choose.” An earlier visit to the US this year saw Luxon meet with Democrat and Republican representatives in anticipation of what is expected to be a tight election.
One person far more willing to stake their claim was former US ambassador Mark Gilbert who told Stuff’s Samantha Hayes that a Trump presidency would be a disaster for New Zealand economically. “Every single business he has ever started other than the Trump Organisation is out of business. He’s bankrupt six companies. He cost investors billions of dollars.”
The better news for exporters
There has been some good news for exporters in recent days. The Gulf deal is big news and came somewhat out of the blue before the weekend. It followed quickly on from a deal with the United Arab Emirates. It’s been 18 years since talks first started with the Gulf nations (Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Oman and Bahrain) and, as noted by BusinessDesk’s Dileepa Fonseka (paywalled), 15 years since a deal was first announced. From day one, the deal will result in tariff-free exports to the region and within a decade that will grow to 99%.
It’s no surprise, then, why Luxon acknowledged the deal in his opening remarks last night, and why McClay has been doing the media rounds. In an interview with Newsroom’s Sam Sachdeva, McClay described it as the “highest quality deal” ever signed off by the six nations in the Gulf Cooperation Council. It’s the first, he said, with a major agricultural exporter. “Over the next 10 years, can we double trade with them? Absolutely.”
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Document reveals ‘risk’ of allowing force against children at boot camps
A ministerial document leaked to the Greens, reported by the Herald’s Jamie Ensor, reveals that military-style academy providers and third parties will have the power to use force against children. And, it acknowledged that it “may be viewed as increasing the potential risk of abuse in custody”. Children’s minister Karen Chhour wouldn’t respond to questions about the document, but Green MP Tamatha Paul, who obtained the document, said it was concerning. “The scary thing about the third-party provider elements is that it feels like it is repeating history,” Paul said. “It’s one of those things in this paper that is eerily reminiscent of boot camps of the past.”
The document said that not providing these powers would mean staff outside of the residential setting “would be exposed to legal risk if they tried to prevent a young person from absconding or from harming themselves or harming another person”. Currently, powers only exist when a person is at a residence. The government intends to introduce the legislation next month.
Health official calls justification for tobacco tax cut ‘crap’
A top Ministry of Health official criticised evidence provided by associate health minister Casey Costello used to justify a tax cut for heated tobacco products. Documents seen by 1News reveal the chief advisor of epidemiology, Fiona Callaghan, described Costello’s information as selective, out of date, and some of it "crap". It follows revelations from July that heated tobacco products would be subject to a 50% excise tax cut which the government said was intended to help get people off cigarettes.
"It’s not so much that all of the studies are crap…" wrote Callaghan in an email. "It’s more that it is a small number of selective research, not up to date, and certainly don’t form any sort of robust evidence review and don’t represent current evidence."
Costello told 1News that the emails showed officials were “undermining” the government’s plans to cut smoking rates. "I have spoken to the director-general about the importance of maintaining public sector standards of integrity and political neutrality," she said in a statement.
Catch up on The Spinoff’s Travel Week
Joel MacManus has just kicked off the second day of his long commute from Stewart Island to Cape Reinga. Follow the live updates and find yesterday’s here.
Shanti Mathias finds out whether it’s possible to travel without damaging the climate.
Fran Barclay presents a collaborative guide to travelling with your parents.
Click and Collect
Blood cancer patients call on National to honour commitment.
The draft of the government’s national culture strategy has been released.
Speaking of culture, Newsroom’s Steve Braunias witnessed Paul Goldsmith buy a book in Queenstown.
A little more on the US election: What might it mean for your Kiwisaver?
Government tightens payout criteria for on-sold quake homes.
The Press has an unpleasantly detailed report on what happened at Canterbury University after dozens of students ate some “bad chicken”.
Jin Fellet was in Penrose as MMT fans turned the streets red ahead of Tonga’s thrilling win. We round up everything coming to streaming services this week. The Spinoff asks a bunch of New Zealanders dotted around the US for a sense of what it’s like where they are ahead of the presidential election. Liam Rātana explains the Nelson Tenths case and why it is important. And Joel MacManus looks at why the ruling is a huge victory for Whakatū iwi.
That’s it for today, thanks for reading. See you back here tomorrow morning.
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🙋🏽♀️Re US election: All this talk about the "economic effect" of whoever wins misses the bigger danger to the people of Aotearoa - one of the candidates models & emboldens all of the lying, covering up, enabling of vested interests, denigrating of those who disagree etc. etc., and one of them DOESN'T 🤷🏾♀️ It is already quite evident that the 3-headed-Taniwha/Coalition-of-Cruelty/Coalition-of-Cockwombles have modelled their attitude to democracy and their roles as "leaders" on what they have seen Drumpf & his enablers get away with until now🤬, & a return to that in the US will embolden the worst of the worst to go even further here - just sayin' 🤢
How many trading partners will we lose if we lose our GE FREE status? Other counties use GM FREE as a selling point too. Will thy still trade with us?