Mexico's troubled trade relationship with the United States could be a boon for New Zealand's exporters, say free trade advocates.
Two-way trade between New Zealand and Mexico is worth more than $700 million. Photo: 123rf.com
The central American country is looking beyond its northern neighbour to boost its economy after United States President Donald Trump threatened to impose heavy tariffs and make it pay for a border wall.
New Zealand is in its trade sights, along with Australia, Brunei, Malaysia, Singapore and Vietnam.
Free trade advocates say a trade deal with Mexico, which is the world's 14th largest economy, would let it play catch-up in a market where it had lost ground to its American and European rivals.
"We lost a lot of market share. This is an opportunity to level the playing field with the United States, particularly if NAFTA (North American Free Trade Agreement) is going to be ripped up or something, it's actually even more exciting," said Saunders Unsworth partner and former trade negotiator Charles Finny.
Two-way trade between New Zealand and Mexico was worth more than $700 million last year, dominated by exports of dairy products and meat, and imports of phones, cars and beer.
The Trans-Pacific Partnership (TPP) would have helped exporters' further prise open Mexico's market.
Mexico imported about 200,000 tonnes of milk powder market a year, and Dairy Companies Association executive director Kimberly Crewther said tariffs limited New Zealand supply to 5000 of that.
"TPP would have levelled that tariff playing field. Starting at 25,000 tonnes per year and moving out to 42,000 tonnes over a 10-year period," Ms Crewther said.
She said the TPP would provide a baseline for talks, although after the dairy sector grumbled that it did not go far enough, it would push for even greater access.
"Our final objective is the complete removal of trade barriers for dairy products. So TPP made an initial step for New Zealand dairy products into the Mexican market but it didn't finish the job," Ms Crewther said.
Other sectors may seek to shorten timelines for complete tariff elimination.
Under TPP, Mexico would have eliminated beef tariffs over 10 years, sheep meat over eight years, wine over three years and all seafood over 15 years.
On the other side, agriculture tended to be a sensitive area for many countries, with powerful lobby groups bending the ear of vote-conscious governments.
Special Agricultural Trade Envoy Mike Petersen was optimistic that would not stand in the way of a good deal being signed.
"We're pretty aligned on agriculture with Mexico. And certainly they've got demand for products we produce and equally I think we can put together a good partnership."
But Green MP Barry Coates was dismayed the government continued to choose trade deals that favoured big business, and ignored the shift internationally towards agreements that benefited society.
"The world has changed. The European's approach to trade negotiations has changed. Big developing countries like India and Brazil have changed their approach to trade negotiations," Mr Coates said.
"That is much more around the current issues; issues of climate change affected by trade issues. Issues of helping New Zealand small business as opposed to just large exporters."
New Zealand has not been formally notified by Mexico about starting talks. But the subject will no doubt come up next week, when Trade Minister Todd McClay travels to Mexico to discuss the TPP.
