Polity by Rob Salmond

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Polity: Four cents on Brexit, Fonterra, and New Zealand

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  • Russell Brown,

    But there’s a big flipside to this, which a very smart trade professional talked me through the other day. A good proportion of Fonterra’s current access to EU markets was granted as a continental concession in the 1973 negotiations for the UK’s EEC membership. And this 1973 agreement is one of the most important things Brexit will pick apart.

    Holy shit.

    Auckland • Since Nov 2006 • 22848 posts Report Reply

  • John Palethorpe,

    The lawyer, David Allen Green, has pointed out that the longer Article 50 isn't invoked - the less likely it will be. Whoever succeeds Cameron will have to do it, and take the consequences of doing it. Boris and Gove hoped Cameron would do it, so they could defer responsibility - the porcine prowler didn't, so now it's on.

    The Stop Boris movement relies on Boris not making the final two - if he does, it's likely the Tory membership will elect him leader. Not entirely unlike the Stop Corbyn group (last years, not the current coup attempt), or the Stop Trump group - and we know how that ended up.

    Auckland • Since May 2015 • 83 posts Report Reply

  • Hebe, in reply to Russell Brown,

    Holy shit.

    Seconded.

    Christchurch • Since May 2011 • 2899 posts Report Reply

  • Ian Dalziel, in reply to Russell Brown,

    Attachment

    A good proportion of Fonterra’s current access to EU markets was granted as a continental concession in the 1973 negotiations for the UK’s EEC membership.

    …and perhaps something Matthew Hooton forgot to look into when he damn near created Fonterra all by himself back at the turn of the millennia - or was that merely “helped with the formation of Fonterra” - (This reading of his CV may contain exaggeration and hyperbole…)

    At 28, he played a lead role in the government relations and communications programmes that led to the creation of Fonterra, becoming the company’s first head of communications, managing the announcements of all senior executives, the first election to the Board of Directors and announcements of new ventures with partners in Europe, North and South America and India.

    http://www.exceltium.com/team/matthew

    I wonder if ‘Exceltium’ and ‘Smile-and-wavium’ are are much like P – as in Phosphorous – it’s what’s left when you boil all the piss and wind away…


    *Cartoon source: http://www.teara.govt.nz/en/cartoon/21982/eek-its-the-eec

    Christchurch • Since Dec 2006 • 7950 posts Report Reply

  • Rich of Observationz,

    Also, Britain produces a lot of milk. Given they won't have EU access, EU subsidies or EU quotas it's likely that they'll want to protect their own farmers ahead of importing anything.

    And it's not like the UK makes anything we can offer to buy in return - their car and civil aircraft industries will be shutting down and in any case since NZ's starting offer is full market access to all comers, we don't actually have any negotiating chips.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Corin H,

    I think there’s a real chance that Fonterra, and potentially other major agricultural exporters, will find themselves losing some of their EU access well before they gain any countervailing access to the UK. That could cause big problems for us, and we should be hedging ourselves against that possibility with haste.

    Not quite.
    The EU and the UK will have to negotiate over how the tariff quotas are divided up, then have to consult with other WTO members (including NZ) over the amendments.

    Under WTO rules, the renegotiation process is meant to ensure that any changes are "not less favourable to trade ... prior to such negotiations". If not, compensation is required.

    Now NZ is likely to be vulnerable to political machinations between the EU and the UK as the EU/UK tries to force the other to take on more of the quota.
    But there should not be a net loss of market access for NZ exporters

    Since Jan 2007 • 14 posts Report Reply

  • Ian Dalziel, in reply to Rich of Observationz,

    Bang, Bang...

    And it’s not like the UK makes anything we can offer to buy in return –

    Hasn't Gerry Brownlee got a 20 Billion budget to buy war stuff, and doesn't the UK make a lot of those sorts of things (6th biggest exporter in 2014) ?
    http://www.stuff.co.nz/national/politics/80835677/Defence-White-Paper-Government-unveils-20b-defence-plan-for-new-planes-boats-and-cyber-security

    of course they'll want to leave a few dollars here by getting a few of Alan Gibbs Aquadas... and it'd be a nice thank you for his keeping Act afloat to rule Epsom, maybe...
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10784296

    Christchurch • Since Dec 2006 • 7950 posts Report Reply

  • Rob Salmond, in reply to Corin H,

    Under WTO rules, the renegotiation process is meant to ensure that any changes are "not less favourable to trade ... prior to such negotiations". If not, compensation is required.

    Interesting point, and thanks for posting it.

    I expect, though, that phrases like "not less favourable to trade" are open to all manner of legal manoeuvring. For example, does "not less favourable to trade" mean for every single tariff line between every single bilateral pair of nations, or for overall trade between every bilateral pair, or for overall trade going into / out of the country making changes, or as a vibe? Methinks it would be pretty expensive for NZ MFAT to find out. I'm sure I'm missing other interpretations, and existing precedents may be less than helpful here because of the very unusual negotiation UK / EU will be involved in.

    Wellington • Since Jun 2015 • 102 posts Report Reply

  • Alfie, in reply to Rich of Observationz,

    Also, Britain produces a lot of milk.

    So does Ireland... more than they can cope with at the moment. In the UK 55% of the average farmer's income currently comes from EU money. The National Farmers Union is warning that prices will have to rise for UK farming to survive.

    The UK already imports 40% of its food and prices are bound to rise when you factor in tarriffs and a lower pound. 38% of British lamb is sold to the EU, but I'm sure other EU countries will step up production to fill that gap.

    It's hard to see anything good resulting from Brexit.

    Dunedin • Since May 2014 • 1437 posts Report Reply

  • Rich of Observationz, in reply to Ian Dalziel,

    Well yeah. And often, if purchasing government ministers ask nicely, they can find their personal bank accounts get nicely filled up by arms companies:
    - https://en.wikipedia.org/wiki/Lockheed_bribery_scandals
    - https://en.wikipedia.org/wiki/Al-Yamamah_arms_deal

    Not that any NZ politicians would engage in such shenanigans, unlike some of their UK counterparts.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Hilary Stace, in reply to Ian Dalziel,

    Nice to see a Nevile Lodge cartoon.

    Over a decade ago I had a very pleasant part time job cataloguing some of the hundreds of Lodge cartoons in the Turnbull Library collection. That was not one of mine, as the ones I worked on were from the 1970s, but the descriptions were much the same. You had to describe them in detail for the database which didn’t at that time include the image. Fortunately, I was old enough and political enough to identify most of the people and events in those 1970s cartoons.

    But what I remember about those cartoons was the size and quality of them. Each was about A1 size on good quality paper and an artwork in its own right. Mostly done in ink but he sometimes used the new technology of letraset and you could see the occasional brush strokes of white out fluid. He had to produce a clever, witty, topical artwork every day and he sometimes drew caricatures of himself in the corner struggling to come up with ideas.

    Wgtn • Since Jun 2008 • 3226 posts Report Reply

  • Sacha, in reply to Hilary Stace,

    Have to wonder what some of those earlier artists could have done with computers. Maybe just more?

    Ak • Since May 2008 • 19740 posts Report Reply

  • Joe Wylie, in reply to Hilary Stace,

    But what I remember about those cartoons was the size and quality of them....He had to produce a clever, witty, topical artwork every day and he sometimes drew caricatures of himself in the corner struggling to come up with ideas.

    Thanks for that. Lodge loomed large in my cartoon-starved childhood. While he often reflected the unexamined prejudices of his time - unkempt protesters, those uppity black power-saluting olympic athletes - he strove to maintain an elegant David Low-ish standard of line and generally respected his audience's intelligence.

    Looking back, some of his best stuff was for the full front page of the Saturday night Sports Post, where he could be unexpectedly witty. On the occasion of a tour by the French rugby team, his guide to French rugby phrases included Honi soit qui mal y pense - "Gather round while I change my pants."

    flat earth • Since Jan 2007 • 4593 posts Report Reply

  • Matthew Hooton,

    Don't know who your very smart trade professional was, but intuitively it doesn't seem right. Charles Finny has a very different view: https://www.facebook.com/charles.finny.71/posts/1225138547518614

    Auckland • Since Aug 2007 • 195 posts Report Reply

  • andin, in reply to Matthew Hooton,

    intuitively it doesn’t seem right.

    Really! Intuitions, everyone has them, its what one believes they are whispering to their inner being when people usually get into trouble.
    Now perhaps you are an exception, its not a rule.
    Is that all you have to offer?

    raglan • Since Mar 2007 • 1890 posts Report Reply

  • Ian Dalziel, in reply to Sacha,

    Attachment

    what a difference a machine makes…

    Have to wonder what some of those earlier artists could have done with computers.

    Babbage in, Babbage out…

    Christchurch • Since Dec 2006 • 7950 posts Report Reply

  • Matthew Hooton, in reply to andin,

    Yes, so read the link which explains the relevant WTO rules.

    Auckland • Since Aug 2007 • 195 posts Report Reply

  • Rich of Observationz,

    I don't see how "not less favourable to trade" applies. NZ hasn't had a free trade agreement with Britain since 1973? It has one with the EU, which is a different entity.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Marc C,

    "Once the UK triggers Article 50 of the Treaty of Lisbon, it loses basically all leverage with the EU, because within feasible bounds Brussels knows the UK has to take whatever deal is on offer. If the UK ever says: “well if that’s your bottom line, there’s no deal,” it is left with pre-1973 nothing. That won’t play well in Blighty, meaning Britain's leaders have painted themselves into a very tight corner."

    George Osborne seems to think they will be given time to work out proposals to put before the EU, for negotiations, but with there being no effective government, Cameron having announced he will not hand in the Article 50 application, and others like Johnson disqualifying themselves with stupid comments by the hour, the EU will get damned furious as they seem to expect things to start moving as of tomorrow.

    http://www.theguardian.com/politics/live/2016/jun/27/brexit-live-george-osborne-economy-corbyn-shadow-cabinet
    https://www.theguardian.com/business/live/2016/jun/27/pound-shares-markets-brexit-crisis-osborne-lew-business-live?page=with:block-5770cf28e4b0be24d34f640f#block-5770cf28e4b0be24d34f640f
    https://www.theguardian.com/business/live/2016/jun/27/pound-shares-markets-brexit-crisis-osborne-lew-business-live?page=with:block-5770c610e4b0f43038109fbc#block-5770c610e4b0f43038109fbc

    "Osborne says he favours delaying triggering Article 50 -- to start the process of leaving the EU – until it’s clear what the terms would be.

    That might alarm EU leaders, who want Britain to exit the building sharpish. But it might calm the City, as it gives some breathing space for the political crisis raging in Britain to calm down."

    These guys have lost the plot, the Conservatives are in turmoil, there is noone really in charge anymore, nobody has any credit left, and there is with the turmoil in Labour no alternative government that could take over.

    On Al Jazeera news they are talking about new general elections as the only way forward now, but that will take months to organise.

    And the EU cannot let the Brits off the hook easily, as that would send signals to populations and EU critics all over Europe, to also challenge the EU Commission and present system, and go for a referendum, thinking that way they may be able to put pressure on for better terms for their business enterprises, economy, workers and society.

    We are watching the dismantling of the second largest economy on this planet, the European Union, all set off by voters wanting a Brexit in the UK.

    Auckland • Since Oct 2012 • 437 posts Report Reply

  • Matthew Hooton, in reply to Rich of Observationz,

    We have a free trade agreement with neither UK nor EU. The trade relationship is governed under WTO agreements .

    Auckland • Since Aug 2007 • 195 posts Report Reply

  • Rob Salmond, in reply to Matthew Hooton,

    Don’t know who your very smart trade professional was, but intuitively it doesn’t seem right. Charles Finny has a very different view:

    Not sure I 100% agree with your police work there, Lou. From Finny's post:

    And what about the quota arrangements applying to New Zealand in sensitive areas of agriculture? Do these get allocated between the EU and UK? Or because they were negotiated to compensate NZ for UK entry into the EEC do they get allocated fully to the UK? - Again there is uncertainty over this and how and when negotiations are held.

    Which is exactly my point.

    Wellington • Since Jun 2015 • 102 posts Report Reply

  • Hilary Stace, in reply to Joe Wylie,

    From my childhood I remembered Lodge as rather blokey mainly from his cartoons in the Sports Post. But I developed a new respect for him while working with hundreds of his cartoons. They had a strong narrative and were often -subtley - about the little man ranting against the powerful. He could be quite savage about Muldoon. Some great social and political commentary of the era. There were several about the EEC as I remember.

    Wgtn • Since Jun 2008 • 3226 posts Report Reply

  • Hilary Stace,

    Totally irrelevant to Brexit (although education itself is a relevant aspect), but I remember coming across this one just as the Labour Government was bringing in NCEA. Remember those days when you stayed at school until you got 200 marks in school cert in one year, however long it took?

    http://natlib.govt.nz/records/23033666?search%5Bpath%5D=items&search%5Btext%5D=nevile+lodge+school+certificate

    Wgtn • Since Jun 2008 • 3226 posts Report Reply

  • izogi, in reply to Ian Dalziel,

    Attachment

    (ref)

    Babbage in, Babbage out…

    Okay, a diversion. Since you've referenced Babbage, I highly recommend Sydney Padua's The Thrilling Adventures of Lovelace and Babbage... which is derived from the web comic that's nicely consolidated here.

    Wellington • Since Jan 2007 • 1141 posts Report Reply

  • Ben Austin,

    I've heard the figure of 20 full time trade negotiators actually work for the Foreign and Commonwealth Office at this point. They're going to be rather busy in the new brave world of amazing trade deals.

    I remember noting to some Leave intellectuals (on Twitter of course) that modern trade deals tend to be extremely long (hundreds or thousands of pages) and therefore quite complicated but they were reasonably sure they could do it all pretty fast.

    London • Since Nov 2006 • 1027 posts Report Reply

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