A trading nation

New Zealand survives as a trading nation because of the links it has built up around the globe stretching back to the first successful shipment of frozen meat sent on the sailing ship Dunedin. The success of that shipment from New Zealand to Britain in 1882 helped lift the then colony out of economic depression.

The voyage from Port Chalmers to London paved the way for the trade in frozen meat and dairy products which became the cornerstone of New Zealand's 20th-century economy. The production of lamb, butter and cheese would flourish as New Zealand established itself as ``Britain's farmyard''. Britain remains an important market for New Zealand produce but successive governments have looked to the Indian subcontinent and Asia as the growing middle class there finds an appetite for Western food products.

Prime Minister John Key yesterday announced the launch of negotiations to upgrade the New Zealand-China free trade agreement (FTA), which will have major implications for this country should they conclude successfully. New Zealand was the first developed country to negotiate and conclude an FTA with China and now it will be the first developed country to launch an upgrade of an FTA. In the eight years the FTA with China has been in place, it is said to have exceeded all expectations and is now regarded as a showpiece on the importance of trade liberalisation.

China is New Zealand's second-largest goods and services export market and the largest export destination for goods. In the year ended June, the value of goods and services exports totalled $12.2 billion. It is becoming increasingly important for New Zealand to start strengthening relationships with China now the Trans Pacific Partnership trade agreement seems doomed to fail.

United States president-elect Donald Trump is firmly against trade liberalisation and is talking about taking jobs back to America from China, Mexico and Canada - in particular. Mr Trump is not the only one wanting to step back from the TPP deal. So does Vietnam. Vietnam's Prime Minister Nguyen Xuan Phuc announced his country would not ratify the Asia-Pacific trade deal because of the US decision to suspend the deal.

There is a suggestion the remaining signatories to the TPP will use the next two years to ratify the more than 2000-page agreement and look to each other to implement a regional trade deal without the US. Without the US, China has the freedom to expand its influence in the Asia-Pacific region and the upgrade of the New Zealand-China FTA gives this country an early advantage.

Since the FTA was completed, New Zealand and China have negotiated other agreements. The existing FTA has largely removed tariff barriers between China and New Zealand, although there are areas which could be improved, including dairy volumes, chilled meat exports, processed wood products and agreements for horticultural access. Business leaders say the other focus is on technical barriers and trade and services barriers still causing difficulties for New Zealand exporters. Since the original agreement was signed, e-commerce has grown in importance for bilateral trade. It is important the regulations around e-commerce help the expansion of this trade.

The third reading of the Trans Pacific Partnership Agreement Amendment Bill was completed in the New Zealand Parliament last week. Although critics say the Bill passing is a waste of time since Mr Trump's election, it does signal the Government's willingness to engage in openness and inclusiveness in global trade.

New Zealand has moved on from being Britain's farmyard to being the supplier of top quality food products to nations around the world. Any resurrection of trade barriers will hurt this country and its exporters and the Government needs to remain keenly focused on its trade agenda.