21 Jun 2016

McClay hints 2017 FTA with Europe likely

2:08 pm on 21 June 2016

New Zealand is shoring up links with European countries to forge a free trade agreement, regardless of whether Britain decides to leave the European Union (EU), Trade Minister Todd McClay says.

no caption

Photo: RNZ / Alexander Robertson

Britons go to the polls on Thursday to decide whether to stay in the union.

New Zealand First leader Winston Peters said a British exit from the EU could be a boon for New Zealand exporters.

However, Mr McClay told Morning Report there could be significant costs if Britain did leave the EU, and the biggest cost was uncertainty.

"I don't agree with New Zealand First that it would be necessarily good for NZ exporters - look, you know, the UK has got one third of our exports to the EU now and it's imperative we have an ongoing positive relationship with the European Union as well as the UK."

He said there was a consensus building that a free trade agreement would be launched next year.

"We've been shoring up relationships across the board with the desire to negotiate a free trade agreement so over the last year I've visited 14 or 15 member states and had direct conversations with their trade ministers. I've engaged bilaterally with another five or six and we've had other ministers engaging also with them."

A study by the New Zealand Institute of Economic Research last week suggested New Zealand would "undoubtedly suffer" economically if Britain voted to leave the EU.

However, Mr McClay said the timing was good - if Britain voted to leave, it would not affect New Zealand's trade with the country for at least two years.

"The process in the European Union is that they must have discussions over a two-year period about how to exit, so number one they don't exit the day after the referendum ... and I've received advice that it could take up to 10 years that they would work out what that relationship would be."

But there would eventually be significant costs involved, he said.

"The EU is very important for us for exports and trade now, in some ways more important than the UK, so we're going to have to take some time to work through that with them."

A Financial Times poll of polls showed both sides of the vote were neck and neck.

Brexit tension high over MP's death

In the United Kingdom, anti-European Union party UKIP has accused the Prime Minister David Cameron of scaremongering by seeking to link the killing of Labour MP Jo Cox last week to the Leave the EU campaign.

Mrs Cox was outspoken in her support of doing more to help Syrian refugees and some voters said they were wavering on their support for leaving the EU.

Former chairman of Britain's governing Conservative Party Sayeeda Warsi also quit the campaign, accusing it of spreading hate and xenophobia.

She highlighted a UKIP poster showing a queue of refugees and migrants on the border between Slovenia and Croatia.

UKIP leader Nigel Farage denied stirring hatred.

Meanwhile, France has raised the prospect of an influx of thousands of refugees to Britain if the Brexit vote is successful.

French economic affairs minister Emmanuel Macron told media that a vote to leave the European Union would mean the end to British immigration checkpoints in Calais and Dunkirk.

Journalist Stefan de Vries told Morning Report that in particular Mr Ayrault had threatened to open the "jungle of Calais" where many refugees were staying, which was just over 33km from Britain.

He said France was keeping the refugees secured and if the UK left the EU it could put an end to the 2003 Le Touquet agreement, meaning thousands of migrants and refugees could cross the channel.

"It's actually very simple to get rid of this agreement and it's a very serious threat that can be put into action within a fortnight."

He said there was a lot of insecurity and scaremongering from both sides.

Get the new RNZ app

for ad-free news and current affairs