Christopher Luxon plans free-trade talks blitz as Trump changes tune on tariffs
Prime Minister Christopher Luxon will call around world leaders later today in a bid to save what is left of the rules-based trading system after it was tested to breaking point in the wake of US President Donald Trump’s tariffs.
He also announced that he will travel tothe United Kingdom later in the month to talk “trade, security, and the geopolitical backdrop in Europe and the Indo-Pacific” with Prime Minister Sir Keir Starmer.
Speaking to the Wellington Chamber of Commerce breakfast this morning, Luxon spoke of the virtues of free trade for New Zealand, not just because it opened up markets for exports, but because it made imports cheaper at the same time, lifting overall living standards.
Luxon said he would be testing what leaders “can do together to buttress the rules-based trading system”. He did not disclose the leaders with whom he planned to speak, but said he was keen to speak with leaders from the Asia-Pacific region.
He said that while some commentators have declared an “end to the era of free markets” he was not ready to “throw in the towel quite yet”.
“Kiwis have worked too hard and for too long, to give up on the values and institutions which have seen our country and the region we live in thrive.”
Luxon said he would explore whether there was a way to use one of New Zealand’s largest trade agreements, the CPTPP, as a springboard to a better global trading system.
New Zealand was one of the original P3 countries that began negotiating the deal, which grew into one of the world’s most important trade deals, which is still growing, with the ascension of the UK recently.
“New Zealand will continue to work with like-minded countries to promote free trade as a path to prosperity and explore the role of the CPTPP in strengthening that vision.
“One possibility is that members of the CPTPP and the European Union [EU] work together to champion rules-based trade and make specific commitments on how that support plays out in practice.”
Labour’s outgoing foreign affairs spokesman David Parker recently floated the idea of getting the EU to join the CPTPP as a way of bolstering the rules-based trading system, which has been under strain for nearly a decade thanks to dysfunction at the World Trade Organisation. He suggested building on the CPTPP might be a way around that impasse.
Labour's foreign affairs spokesman David Parker backed approaching the EU to join CPTPP. Photo / Mark Mitchell
Luxon said that a full EU accession to the CPTPP “could take some time because all 27 EU nations would have to agree to it, however, he said there could be other ways of aligning the EU with CPTPP.
“That will ultimately be a decision for the EU,” he said.
Luxon gave a potted history of former Prime Minister Robert Muldoon’s protectionist economic policy of the 1970s as a parable for insulating a country from the global economy.
In those years, when cars and TVs were assembled domestically, New Zealand suffered “spiralling prices” and a heavily subsidised but “much less productive, much less diverse” agricultural sector.
Luxon described these policies, while being “foolish economics” also “reflected the best efforts of political leaders to insulate New Zealand from an era of major social and geopolitical change”.
“History shows those best efforts were a mistake, that required years of difficult choices and careful recovery,” he said.
Thomas Coughlan is deputy political editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.
