Trade rules crisis may harm NZ

A warning that the ‘‘golden weather’’ for New Zealand trade may be over has been delivered in a newly released briefing to Associate Trade Minister Nanaia Mahuta.

In a paper originally prepared for Trade Minister David Parker in January, Foreign Affairs and Trade Ministry deputy secretary Vangelis Vitalis warned protectionism was on the rise and the World Trade Organisation could lose the ability to hear appeals after December.

That is as a result of the block United States President Donald Trump has placed on new appointees to the WTO’S appellate body, which is supposed to have seven members but is now down to its minimum quorum of three.

Two of the three remaining judges – US lawyer Thomas Graham and the body’s Indian chairman, Ujal Singh Bhatia – will end their terms in December, leaving just one Chinese lawyer Hong Zhao on the body, meaning it would not be able to settle any trade disputes.

Vitalis’ paper said the WTO could not currently hear appeals involving the US, China or India because at least one of its judges would need to be recused.

Parker agreed rising protectionism was a concern.

‘‘We think we will be affected by the downturn in growth and confidence as a result, and that flows through to commodity prices, and investment flows have already slowed down internationally.

‘‘Although exports are still growing internationally, the rate of growth has dropped.’’

He said New Zealand had not so far suffered from closed market access and had instead opened new markets thanks to the CCTPP trade agreement while also progressing negotiations for a new trade agreement with the European Union.

Vitalis said there was no doubt the WTO and its rules were in need of modernisation to reflect dramatic changes in the way trade now occurs.