On 24 May, I blogged about an apparent trade crisis between New Zealand and China, as our meat shipments were held up at Chinese borders – ostensibly for “incorrect” paperwork;
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See previous blogpost: What’s the beef, guv?
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Minister for Food Safety Nikki Kaye said,
“We’ve got MFAT officials and MPI officials working around the clock to resolve this,” says Minister for Food Safety Nikki Kaye. “We’ve been providing technical documentation through to Chinese authorities and we remain confident that this will be resolved in the near future.”
Acknowledgment: TV3 – Meat held up in China costing NZ industry
It’s interesting that the TV3 report stated,
“The problem is believed to have arisen after the Ministry of Agriculture and Fisheries recently became the Ministry of Primary Industries and Chinese border controls aren’t recognising the new names and logos on the export certificates.”
Acknowledgment: IBID
Other media also repeated the official government line – that this was a bureacratic “paper work problem”. The Ministers were even muttering dark threats at disciplining MPI staff who might have been responsible for this “incorrect paperwork” mess.
However, I found this excuse to be weak and unbelievable. Why?
Because as I wrote on 24 May, the MAF (Ministry of Agriculture & Fisheries) became the MPI (Ministry of Primary Industries, well over a year ago.
So why had this crisis arisen only now?
My contention is that the meat export problem was politically motivated. A free trade agreement was in the process of being negotiated between Taiwan and New Zealand,
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Acknowledgment: Fairfax Media – NZ close to Taiwan free trade agreement
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China was flexing it’s political muscle over a free trade agreement being negotiated between New Zealand and Taiwan – a state which China regards as a “renegade province”.
China was reminding New Zealand “who’s boss”.
On 10 June, TV1 News reported that the free trade agreement with Taiwan had been concluded and signed.
However, the news story was curiously reported from two different angles. The TVNZ website reported a purely trade-driven story,
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Acknowledgment: TVNZ – NZ signs trade agreement with Taiwan
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There was no mention of any political dimension in the about report. China (mainland) was not even mentioned, even in passing.
Contrast that to the evening news story on the same day; July 10,
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Acknowledgment: TVNZ – NZ signs trade agreement with Taiwan – TV Broadcast Report
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The relevant story starts at 5:20.
The newsreader, Melissa Stokes opened with this introduction,
“New Zealand has signed a free trade agreement with Taiwan. It’s likely to save our exporters at least $75 million a year, but it’s China’s influence on the agreement that’s raising questions. ”
It was pointed out that no government Minister attended the signing of the Taiwan-New Zealand Agreement – a marked contrast to the much-hyped signing of the China-New Zealand FTA in 2008. Or National’s signing of an FTA with Malaysia in 2009,
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Acknowledgment: Fairfax Media: PM hails signing of Malaysian deal
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The journalist covering the signing, Brian Boswell, asked the Taiwan representative an obvious question,
Brian Boswell: “Would you like a Government minister [to be] here?”
Elliott Charng (Taipei Economic and Cultural Office) replied: “Yes. Of course.”
Indeed he would.
But this blogger believes that China made it abundantly clear to the Beehive that any agreement signed with it’s “renegade province” had to be a ‘low-level’ event, without the presence of any government Ministers or MPs present.
As Boswell remarked, “ But there were none. This agreement was kept under wraps until the last minute despite Taiwan being our eight largest export market.”
Stephen Payton – from the NZ Commerce and Industry Office – appeared to be the most senior representative of the New Zealand government present at the signing. His comments were illuminating,
“ This agreement is signed in terms of New Zealand’s One China policy. And so we have to observe certain contraints around how we deal with Chinese Taipei.”
Indeed!
To drive the point home to viewers, Boswell added,
“ China doesn’t recognise Taiwan as being independent and pressures other countries to do the same.”
“Pressures”?
Such as blockading millions of dollars of our meat exports at Chinese ports?
Green MP, Kennedy Graham, a former diplomat, said,
“ Credit as it sees it and some economic progress out of this deal. But at the same time it’s genuflecting politically to one of the world’s superpowers, and probably being orchestrated behind the scenes by the same super power.”
Boswell finished his report with this remarkable comment,
“ It’s taken more than a year of negotiations. Sources have told One News that China was extensively briefed about the deal and told about the signing.”
This story puts the May blockade of our exports into context and sheds new light on what really transpired.
It now appears that negotiations with Taiwan originally excluded China – which put a few noses out of joint in Beijing – and which provoked a hidden diplomatic incident. This incident was carefully masked by both Beijing and Wellington as a “bureacratic mix up”, as it served neither government’s interests that this become public.
After all, it had been over year that the new MPI documentation had been in use, so it is inconceivable that all of a sudden such a trivial issue could interfere with millions of dollars of trade.
This blogger posits the following;
- Beijing noted the free trade agreement being negotiated between Wellington and Taiwan.
- Beijing demanded that it be consulted and “certain contraints around how we deal with Chinese Taipei” observed.
- Someone at MFAT disregarded China’s demands.
- China insisted.
- MFAT ignored it – or fobbed them off.
- Big mistake on our part.
- Beijing reacted with a partial blockade of our exports.
- Ministers – who had been kept out of the loop, or fed minimal information – were caught out in surprise.
- The Beehive failed to react quickly enough, as Ministers tried to figure out what was going on.
- Beijing tightened the screws.
- The Beehive tried to negotiate.
- No negotiations, responded Beijing, and insisted it’s demands be met.
- As our exports languished at Chinese ports, pressure mounted on Key’s ministers – who eventually capitulated.
- Upshot: any agreement with Taiwan would be at a low-level; with minimal governmental recognition; Beijing would be kept fully appraised; and diplomatic recognition would not be permitted.
It was a stern lesson in super-power muscle-flexing delivered to the Beehive in a way that no New Zealand politician would ever be likely to forget in a hurry.
Meanwhile, as I predicted in May,
On Radio NZ, Primary Industries minister, Nathan Guy stated,
“I’m very disappointed in my officials – issuing export certification is really their core business. And I’m disappointed in how this issue has come to bear. Normally, we have a very strong system and this is very unusual.”
However speaking on Radio New Zealand’s Checkpoint programme, Nathan Guy refused to be drawn on whether any disciplinary action will be taken against staff for the blunder.
Mr Guy said that was a matter for MPI director-general Wayne McNee.
“By and large, MPI do fantastic work and we’ve had an issue here, and I’ve asked the director-general to get to the bottom of it.”
What’s the bet that this entire issue sinks quietly out of sight and nothing is ever heard about it again?
Has anyone heard “whether any disciplinary action was be taken against staff for the blunder “?
Nope.
It kind of sank quietly out of sight.
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= fs =
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Brent Oil at $109 a barrel is another turn of the screw that will eventually crush global trade (and global tourism).
We did have trade before we used fossil fuels. It was time consuming and expensive but we did have it.
Of course, now that everyone’s used to real cheap international transportation it probably does mean that the global economy will collapse once that time expensive, time consuming trade comes back.
Frank
You are very wrong here and lose credibility. The deal with Taiwan has been welcomed formally by the Chinese Foreign Ministry. My understanding is that this has been very carefully negotiated with China and Taiwan.
The meat problem is due to Chinese overproduction of pork.
Mai
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