New Zealand looks to the UK and the EU to diversify the market beyond China

New Zealand wants to reach free trade agreements with the UK and EU this year with the aim of diversifying its export markets, amid further tensions with China, the Pacific national trade minister said.

But Damien O’Connor stressed that Wellington will continue to expand its trade relationship with Beijing, despite tightening ties between Australia and its Chinese neighbor.

“Any country involved in trade sees value in having a diversity of markets, especially in a world that is increasingly difficult through disruptions, climate events, geopolitical events or whatever,” he told the Financial Times.

“It is clear that China is also an important market for Australia. And while we are concerned about some of the ongoing restrictions, we are gaining and building areas of strength between our two nations. ”

China is New Zealand’s largest trading partner, exporting $ 19 billion ($ 13.5 billion) in exports annually through the end of March, a quarter of all exports.

Wellington has managed to avoid the diplomatic conflicts he has had it destroyed Sino-Australian relations for more than a year, encouraging Beijing to frustrate tariffs on Australian wine and barley imports.

“We’ve always been right about our relationship [with China], that’s been very valuable, ”O’Connor said, when asked how New Zealand avoided that fate.

Wellington was the first developed country to sign a free trade agreement with China in 2008, and agreed to renew a market access agreement in January.

However, Wellington has quietly made an effort to diversify trade relations to reduce confidence in China.

As part of that process, O’Connor Liz Truss will meet with UK Trade Secretary in London on Thursday to speed up negotiations on a free trade agreement with the UK. He will later travel to Brussels to discuss an EU agreement.

The truss has set its sights on New Zealand as the next target of a major post-Brexit trade deal. An International Trade Department official said the talks were “the next big game in town.”

But UK officials warned that progress would depend on O’Connor’s meeting with Truss. “New Zealanders will have to give us more in investment, mobility and services if they want a deal. They have been slow on these issues so far,” said a Whitehall senior official.

O’Connor said the New Zealand-UK agreement would probably be similar UK-Australia trade agreement, which was agreed in principle this week. Reducing tariffs on New Zealand farm exports would include dairy, lamb and beef among Wellington’s demands, he said.

He added that British farmers should not be afraid Imports from New Zealand. Most agricultural products were channeled to Asia, the US and other markets, while the volume available to the UK and EU was small. However, New Zealand products may play a role in meeting off-season demand, he said.

Analysts say Wellington’s efforts to diversify its trading partners could help protect its economy by breaking ties with Beijing, although there are few economic reasons to do so today.

“Diversification is always about protecting yourself from risk,” said Rob Scollay, an associate professor at the University of Auckland. “But I’m not sure if there isn’t some kind of political disintegration, there are strong reasons to move away from China.”

New Zealand has been criticized by Australian politicians, analysts and the media for their views comfortable relationship Accused of violating human rights in Beijing, Hong Kong and Xinjiang.

Wellington has continued to expand the powers of the Five Eyes intelligence alliance in Australia, the United Kingdom, Canada and the United States.

Last month, 60 Minutes to emit documentary under the title Dollar vs. Decency: Does China Take New Zealand? which he criticized because O’Connor said Australia needed to “follow us and show respect” in Beijing.

“I probably shouldn’t have said that looking back,” O’Connor said, adding that he has maintained a positive relationship with the Australians.

He also denied that Wellington had made China smooth. “We talk when needed and continue to provide trading opportunities where they are valuable to both the supplier and the customer.”