Fonterra encourages UK to adopt an open trade policy post-Brexit
New Zealand dairy giant Fonterra has encouraged the UK to adopt an open trade policy post-Brexit.
Fonterra’s Trade Strategy and Stakeholder Affairs Manager, Dr. Francis Reid has said that open markets encourage investment, increase competitiveness, and allow for more consumer choice and product innovation in the dairy industry.
Speaking at the Semex Dairy Conference in Glasgow last week, he said that Fonterra and New Zealand were examples of the success of open market policy.
Dr. Reid spoke about how New Zealand’s economic prosperity has emerged over a period of economic liberalisation.
He noted that in the early 20th century the UK was New Zealand’s largest trading partner and the main market for Kiwi dairy exports.
This changed when the UK joined the European Economic Community (EEC), also known as the Common Market, in 1973, which resulted in New Zealand losing its preferential access to the UK.
Initially, to counter that, New Zealand adopted protectionist trade policies, including coupled subsidy payments for farmers and a highly controlled economy, to manage the risks that this change brought, he said.
“Eventually New Zealand opted to deregulate its economy, open its industries up to competition, remove subsidies, and pursue a policy of free trade.
“These policies have laid the foundations of New Zealand’s current economic prosperity and growth.”
The message for a post-Brexit Britain, Dr. Reid told the audience, was that open markets and pro-competition policies drive economic growth.
He said if New Zealand and the UK could establish an open trading and economic relationship post-Brexit, then both countries could build upon the relative strengths of each market, including their geographic proximity to markets in the Asia-Pacific region and the EU respectively.
“A good Brexit, for the UK and for the world, would help to halt the rise of protectionism.”
His presentation included trade statistics which surprised many, including that the UK is the world’s second largest net dairy importer, and that 98% of these imports currently come from the EU.