24 Dec 2016

NZ experts play down China trade warning over steel

1:09 pm on 24 December 2016

China's warning that a New Zealand government investigation into steel dumping will risk trade should not be seen as a threat, New Zealand experts say.

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Photo: 123rf.com

The Ministry of Business, Innovation and Employment launched the investigation after steel-making company New Zealand Steel complained that China was damaging its business.

China responded by calling the inquiry discrimination, and said it would hamper trade between the two countries.

New Zealand China Council executive director Stephen Jacobi said exporters here should not be worried.

"I don't think they're threatening trade retaliation. I don't think that you can read too much into the rather ritualistic statements that have been made from China.

"I think this is par for the course in these sorts of things," said Mr Jacobi. "Such statements are routine whether you deal with the Chinese, the Americans or whoever."

He said the trade rules existed so New Zealand manufacturers had a means of recourse but that they set a very high hurdle to prove not only dumping but that a company or industry had been harmed by the subsidisation.

There were not only the World Trade Organisation rules to consider but those in the bilateral free trade agreement.

"If we all stick to the trade rules, New Zealand sticks to the rules, China sticks to the rules... I can't see that there's going to be a particularly negative reaction on our trade."

He said while China was worried about the global reaction to its difficulties in the steel industry, it would be over-reacting to try to link Zespri's kiwifruit being held up at the Chinese border in August, with the anti-dumping complaint.

An international relations lecturer agreed that China is not trying to bully New Zealand.

Dr Jason Young of Victoria University of Wellington said it was too easy to jump to conclusions that the steel dispute could overflow.

"It's very easy to jump to conclusions that one issue could flow into forms of other in terms of trade.

"I don't think this is bullying. I think if the shoe was on the other foot ... you would also see news stories in the New Zealand media supporting the New Zealand government position.

"The Chinese ... said it could hamper trade but we're reading into it that it could hamper broader trade, but he didn't exactly say that."

Asked if New Zealand Steel's Australian owners might be using the complaint as a proxy to take the Chinese to task, Dr Young said he couldn't comment on that, but that such WTO complaints as this were closely watched by other countries as they could set precedents.

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