[17 November/Otago Daily Times]

New Zealand’s agricultural sector is being advised to look for alternate trading markets with the developing “cold war” between the US and China. The increasing trade tensions between the superpowers could produce a situation in which New Zealand is forced to choose sides, Rabobank’s head of financial markets research for Asia-Pacific, Michael Every, says. Given its significant trade ties that New Zealand has with both countries, China is now New Zealand’s most important trading partner but also has a significant US trade relationship and historically strong diplomatic and cultural ties. Mr Every noted that last month the US concluded a new trade deal with Canada and Mexico, which requires those countries to notify the US before entering into any agreements with non-market economies such as China.  He believes at some point the US is going to come crashing back into the Asia-Pacific region because it’s so geopolitically important and suggested that the price of protecting New Zealand may well be a new trade deal on terms set by the US and which forbids, or greatly restricts, dealing with China.  Mr Every said New Zealand farmers and exporters should look to diversify to other offshore markets, before any demands by either the US or China, significantly impact its ability to trade with the other suggesting markets like Japan, Indonesia and India should be priorities.