This research note recommends a return to New Zealand’s long-cherished bipartisan trade policy that has been damaged in recent years’ debates over the Trans-Pacific Partnership (TPP)
The US economy is growing steadily at 2%, and unemployment is low at 4.3%. The outlook for New Zealand exporters to the US remains solid, albeit not spectacular.
The anticipated stimulus from a tax reform and infrastructure package is unlikely to occur, as the new administration struggles to keep Congress happy.
US trade policy is focussing on penalising China for dumping steel and intellectual property theft, updating the North American Free Trade Agreement and potentially withdrawing from the Korea-US Free Trade Agreement.
None of these processes will run smoothly, and the outcomes could contribute to a challenging global trade environment for Kiwi firms.
Pro-trade US businesses are keeping their heads down to avoid the wrath of Trump instead of pushing for greater economic integration.
New Zealand should take the next few years to reaffirm its bipartisan approach to trade policy and economic integration – starting with TPP – so that it is ready to move swiftly when political conditions improve.