Peters’ Russia bid risky
Policy to reopen free trade negotiations draws forthright rebuke from EU ambassador
New Zealand First’s plans to reopen trade negotiations with Russia have sparked the new Government’s first international crisis.
The unheralded policy this week drew an unusually forthright and undiplomatic rebuke from European Union ambassador Bernard Savage.
At a briefing on Tuesday in Wellington, Savage said any moves made towards thawing relations with Russia — free trade negotiations were frozen in 2014 — would be viewed in a “very negative” light.
The NZ First policy, written into coalition agreement, risks harming relations with one of our largest trading partners in order to enhance those with one of our smallest.
According to 2016 figures the European Union is our third-largest trading partner with a total of $20 billion in imports and exports each year, while two-way trade with Russia amounts to only $417 million.
Winston Peters, the Minister of Foreign Affairs and NZ First leader, dismissed Savage’s concerns about his plans and claimed the current state of affairs was “unfair” for New Zealand businesses.
Labour MP David Parker, the new Minister of Trade, seemed blindsided by the development. “I haven’t really given any thought to the Russian deal yet,” he said.
Stephen Hoadley, an associate professor of international relations at the University of Auckland, said the policy did not appear to have been thought through.
“Do Winston and New Zealand First recognise how inflammatory this might be to those really angry about Russia’s aggression? Is it worth making a few million more in trade to incur criticism from like-minded western countries?”
National Party foreign affairs spokesman Gerry Brownlee said the Government must tread cautiously to avoid coalition policy on Russia tainting more important relationships.
“We’re close to landing an agreement with the EU — a very big trading bloc — and that will eventually spin out to Great Britain,” Brownlee said.
Negotiations with the EU — our third-largest export market and the largest single source of our imports — on a long-discussed free trade deal are scheduled to begin later this year.
Savage made his comments at a briefing for around a dozen civil society figures.
Later in the week a spokesman for the EU embassy attempted to walk back his remarks, claiming they had been made in confidence and declining to make the ambassador available for an interview.
The diplomatic fracas comes after New Zealand First was successful in coalition negotiations to include a line committing the Government to “work towards” a free trade deal with a bloc dominated by Russia.
The policy change was included almost as a footnote in the recently-signed agreement between Labour and New Zealand First, being the second-to-last item in a list of miscellaneous policies labelled “other” on the second-to-last page.
The Customs Union has grown since 2014 into the Eurasian Economic Union, and has seen the addition of Armenia and Kyrgyzstan.
Public briefing notes from the Ministry of Foreign Affairs and Trade said the proposed deal referenced in the coalition agreement had been close to being concluded before it was put on ice March 2014. “Significant progress has been made in the negotiations with the Customs Union since they started in November 2010. However following the events in Ukraine and Crimea, the negotiations have been suspended.” The 2014 suspension was a moment of high diplomatic drama, with then-Trade Minister Tim Groser, in the middle of negotiations in Moscow, abruptly recalled to Wellington. Former Prime Minister John Key told the Weekend Herald the abrupt move was done to express New Zealand solidarity with the international response to the events in Crimea.
“I took the view that it would be odd and inconsistent for a country like New Zealand to continue with negotiations at a time where we were both critical of Russia and supportive of the sanctions others were imposing,” he said. Hoadley said the inclusion of the policy in the coalition agreement was “weird” — given it had little public discussion or promotion — and would inevitably “stir considerable controversy”.
“It would be an unexpected change in policy, one that would reverse settled policy, and one that would contradict the mainstream view of New Zealand’s principal trade partners,” he said.
Peters regularly used Parliament’s question time during the last term of government to criticise Key over the suspension of the deal and argue for a opening of economic ties with Russia.
The Weekend Herald understands Peters met with Valery Tereshchenko, the Russian Federation ambassador to New Zealand, several times in the year prior to the general election.
Questions about the meetings and a request to interview Tereshchenko sent to the Russian Federation embassy in Wellington this week went unanswered.
Brownlee said ambassadors meeting MPs was not unusual.
“Ambassadors always like to get a broad picture of what’s going on in New Zealand. Generally these meeting are to advance understanding between countries, not to become opportunities for lobbying.”
Brownlee noted his own recent sixmonth stint as Minister of Foreign Affairs saw him have less contact with Tereshchenko than Peters has had. “I don’t believe I’ve met the Russian ambassador at all,” he said.
Peters confirmed meeting Tereshchenko, but said he was only one envoy among many.
“All manner of ambassadors ask to speak to me, and I do. I don’t know what’s untoward about that,” he said.
Asked if Tereshchenko was supportive of his efforts to reopen the stalled trade deal, Peters said: “The Russian ambassador was aware of the matters I had raised in Parliament — yes.”