Monday, 28 November 2016 08:32

Trump's Trexit Extricates New Zealand from China Trade Embarrassment without impeding Exports to US (notably wine)

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Pacific Partnership union Presidential sinking welcomed---but public displays of globalisation grief still mandatory  

The pending collapse of the Trans Pacific Partnership trade union  will be secretly welcomed by New Zealand traders and policymakers alike.

One reason is that New Zealand offers no finished goods challenge to United States manufacturers.

The other reason is that the Trump Exit evaporates dangers to still flourishing trade with China which would have been tarnished by New Zealand belonging to what is in effect an anti-China bloc.

New Zealand exports to the United States are overwhelmingly raw materials for further processing.The president-elect vows to restore United States pre-eminence in manufactured goods of all description.

Mr Trump claims that over the past 20 years that the United States has financed the rise of the Chinese middle class.

This he claims has been at the cost of the careers and jobs of the United States whose own middle class has been relegated in many states to low paying jobs, if they have jobs at all.

Mr Trump’s overwhelming loyalty is to the productivity of United States rust belt states, as they are known, which saw him through to the presidency.

Mr Trump is pledged to revive specific United States industries. They are in:-      

  • Coal      
  • Steel        
  • Textiles       
  • Automotive

None of these compete with anything coming from New Zealand. Indeed, New Zealand can claim common cause with the United States in seeing its own textile industry shrink in the face of exports from the Orient.

In the last analysed statistical year New Zealand was the United States’ 57th largest supplier of imports.

The main categories were: Meat (frozen beef), albumins, modified starch and glue (mostly caseins), wine dairy, eggs, and honey, along with milk protein concentrate .

The one challenge in the process finished consumer product category  is wine (USD296 million.)Wine though is focussed on the West Coast, notably California. None of these wine states are by definition rust belt states.

They overwhelmingly voted for Hillary. They can expect no favours in protective tariffsfrom the incoming administration.

On the president-elect global hit list meanwhile are countries such as Malaysia, Mexico, Singapore, and Vietnam, and Japan. These all compete in manufactured products with the United States.

They are all members of the Trans Pacific Partnership Trade Agreement and nations which the Trump Doctrine blames for taking away manufacturing jobs from his American constituency.

January 21 next will be the first day in office for President Trump with the proclaimed cancellation of the Trans Pacific Partnership as his first executive priority.

From the MSCNewsWire reporters' desk - Monday 28 November 2016