Brexit complication, but no ill effects

Robert Patman
Robert Patman
Britain's moves to leave the European Union may complicate life for our exporters but will not damage New Zealand’s economy, Prof Robert Patman says.

Prof Patman, of the University of Otago politics department, said Britain’s Brexit moves would not cause the "traumatic" adjustment New Zealand faced when Britain entered the EU in January 1973.

Then, New Zealand had faced a "nerve-racking" scramble to find alternative markets, but now a high proportion of our trade already went to the Asia-Pacific.

The likely outcome of Brexit for New Zealand was "neutral to positive", as separate free trade agreements were likely to be reached with the EU and Britain.

The former offered a much bigger market, of about 450million, as opposed to Britain’s 66million, he said.

"It’s a pretty good situation for us," he added.

Brexit, including a possible "no deal" Brexit, were much more likely after the British Conservative Party’s recent big general election victory.

Joining the EU had strengthened Britain economically, but since earlier indications that Britain wished to leave, its economic growth had declined.

Moving out of a trading bloc which received about 45% of Britain’s exports was more likely to damage Britain’s own economy than ours, he said.

One new complication for modest-sized New Zealand firms wishing to export to both Britain and the EU was the problem of where to base themselves, and more firms could opt for the Republic of Ireland as a European headquarters.

Ireland was English-speaking, and still part of the EU, allowing exporters to use Ireland as a base for operating with the wider EU market.

When Britain had been in the EU, New Zealand exporters could use Britain as a similar export gateway to Europe, and some large exporters, such as Fonterra, could afford to be based both in Britain, and somewhere in the EU.

But smaller firms would now have to choose, he said.

As a small country, it was also in New Zealand’s interests to uphold a rules-based international order.

However, it was concerning that several laws, including electoral law, had been breached by campaigning during the 2016 EU membership referendum, but not enough had been done to redress this offending and uphold the rules, he said.

British Prime Minister Boris Johnson had raised the idea of forming closer post-Brexit trading ties with Commonwealth nations, but New Zealand and other Commonwealth countries had since matured and, to some extent, moved on.

"We’re not going to be Britain’s saviour."


"Were not going to be Britain's saviour". The Guardian have reported before that New Zealanders have been pulling the strings on Brexit. The Chandler Brothers through their Legatum Institute were strong lobbyists in the early days and had the ear of key Conservatives. Crawford Falconer is now going to be the UK's Chief Trade Negotiator. New Zealand politicians have recently been Lobbying in the UK for CANZUK particularly David Seymour.

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