What a difference a ‘u’ can make. On this side of the ditch, without a ‘u’, there is irresponsibility and hypocrisy but on the New Zealand side there is a rational concern for the national interest. Bill Shorten’s Labor Party (definitely non ‘u’) is doing its best, under instructions from its masters in the rabid CFMEU and other self-serving mates, to undermine the economically and politically vital free trade agreement Australia has signed with China, threatening to oppose it in the Senate and publicly supporting the unions’ expensive advertising campaign against it. But the New Zealand Labour Party (which is much more ‘u’) not only initiated the Kiwi’s FTA with China in 2004 but unhesitatingly voted for its parliamentary ratification in 2008 when it was overwhelmingly accepted 104 to 17.

Australia’s Trade Minister Andrew Robb has now, seven years later, apparently negotiated such a better deal than New Zealand’s that Kiwi Prime Minister John Key wants to re-jig NZ’s China FTA to match it. Asked recently whether he wanted to renegotiate the deal with China in the light of Australia’s success, Mr Key said that preliminary discussions had already taken place ‘particularly around dairy’, where New Zealand believes Australia’s dairy farmers will get better access to China. Under the NZChina FTA, China must offer the same terms to New Zealand as in any subsequent FTA with other countries.

So the longer the ALP delays the AusChina FTA, the more it will disadvantage New Zealand, as their exports, particularly dairy, have far exceeded the levels at which, over time under their FTA, China’s tariffs are removed. This is a big issue in New Zealand, as their FTA has resulted in such a huge rise in exports to China that this higher-than-agreed growth attracts the old tariffs. Naturally, NZ is keen to get the benefit of Australia’s better tariff-cutting deal as soon as possible; Bill Shorten’s union-dominated Labor Party (as distinct from the state Labor leaders, former Prime Minister Hawke and former senior Labor ministers who want the FTA) is doing its New Zealand cousins no favours.

By following the rugby union example and beating Australia to the punch once again, New Zealand has grabbed a big share of some markets that could otherwise have been Australia’s. Since the FTA, New Zealand’s food exports have quadrupled from 3 per cent to 12 per cent of China’s total food purchases while Australia ‘has struggled to grow its market share’ which is still around 3 per cent – and without an FTA we will ‘fall further behind in the race to get on the plate of Chinese consumers’, according to a leading exporter. So ‘The NZ-China FTA is one of New Zealand’s major trade success stories’ concludes a detailed study of the FTA in July this year by Victoria University in Wellington for the NZ Contemporary China Research Centre, with New Zealand turning a trade deficit with China into a surplus when many of NZ’s traditional markets remained flat.

China has already overtaken Australia as NZ’s largest export market, even though the full benefits of the free trade deal that is to cover 95 per cent of New Zealand’s exports to China do not accrue for another four years. Primary beneficiaries have been primary industries, with dairy, wood and meat topping the list as the rising newly-urban Chinese middle classes are providing a massive market – and clearly showing NZ’s economic dependence (like Australia with energy and iron ore) on a narrow base. But if, like Australia, NZ’s economic future is in moving up the value chain, the FTA’s concentration on low value commodities may be downgrading the economy. However, there have also been significant increases in Chinese investment in NZ (some of it controversial), immigrants, students and tourists.

And there have been some serious problems, from which Australian exporters should benefit. NZ has damaged some of the enormous good will that came from their being the first developed nation to sign an FTA with China, by a combination of lack of understanding of the Chinese way of doing business, some bureaucratic conflicts and, worst of all, contaminated milk products where there is now a need to rebuild trust in food safety as consumers look to other suppliers – like Australia?