United States foreign worker clampdown will boost US milk production costs
MSCNewsWire - Nov 10, 2016 / New Zealand’s primary produce export opportunities are more likely to rise rather than decline with the election of Donald Trump as United States President. The reason is that the incoming president as a priority has the dismantling of the confrontation between the US and Russia.
The economic component of this stand-off is the United States-led embargo on exports to Russia. A détente will open up Russia especially to exports from the EU which is the United States main partner in the embargo.
The lifting of the embargo will introduce the free flow of food exports from EU nations into Russia. The problem for New Zealand since the embargo was installed is that the EU food exports, notably milk, have backed up all over Europe instead of going to Russia.
For its part Russia in defiance has enforced the embargo by destroying EU foodstuffs with back door labeling or being shipped under proxy bills of lading. French foodstuffs carrying face value Moroccan origination are just one example of this.
The dissolving of the US led embargo on Russia will also allow New Zealand which is also a partner in the embargo to start trading again directly with Russia.
New Zealand participation in this trade embargo with its self-damaging results has long been cloaked in a conspiracy of silence. Politicians and exporters alike have kept their mouths shut for fear of US reprisals.
Even though the incoming president has promised to scrap United States trade treaties in order to build US domestic employment, the abandonment of the Trans Pacific trade agreement signed by all participating countries in Auckland earlier this year is unlikely to present a serious problem to New Zealand exports.
The legislation attendant on the treaty is subject to a lengthy clearance process having only just navigated its latest reading in the New Zealand parliament. Other countries will take years to approve it. Critics claim that the Trans Pacific trade deal, and other such US treaties with other countries merely double up on what has already been achieved under the WorldTrade Organisation among other such bodies.
An additional point, and one that may make a President Trump resist pulling the plug on it is that the Pacific agreement is primarily viewed as a device by the United States to preserve its global supremacy in currency leadership. At least 80 percent of world trade is carried out in the USD and the United States is determined to stop China taking any part of this share with its own rival currency..
Meanwhile the central theme of Trump policy, curbs on immigration, is likely to add to the value of New Zealand primary products. This is because in the United States Mexico is the home of much of the US milk workforce at every phase.
A reliance on United States nationals to do the work will add greatly to the costs at every stage of US milk production.
From the MSCNewsWire reporters' desk / Thursday 10 November 2016
