Key insists Zespri's China rot problem not evidence of trade retaliation

Prime Minister John Key says the Chinese government's decision to raise problems with rot in Zespri kiwifruit is not evidence of the kind of trade retaliation it was alleged could occur if New Zealand conducted an investigation into claims that China is dumping steel here and undermining local steel makers unfairly.

In carefully worded comments to his first post-Cabinet press conference for almost a month, Key said he was "limited in what I can say" in the context of the steel dumping claim, which New Zealand Steel has been advancing with the Ministry of Business, Innovation and Employment.

"Every country, if it faces a particular issue, will always want to push back on that issue," said Key. "Certainly, I think the Chinese position would be that they are not dumping steel. Whether they are or they aren't isn't something I'm in a position to comment on or to arbitrate on."

However, the government was "comfortable" with assurances from the Chinese Trade Minister, given as recently as a meeting last week with his New Zealand counterpart, Todd McClay, that talk of trade retaliation was unfounded.

"There have been a number of discussions between the Trade Minister for NZ and the Trade Minister for China. The broader issue was discussed that from time to time there are technical issues that are confronted and that those are dealt with. That's the way the government sees this issue," said Key. "This issue of rot is not new. We had it with apples and a protocol was established. My understanding is that Zespri has voluntarily taken the product off the supply chain to China while they look to establish a protocol."

Reporters asked Key why, given that the rot issue was first raised in June, the issue had only led to action on the Chinese wharves following the recent reports of potential trade retaliation.

"I can't answer that answer. I simply don't know. But if it was the reverse way round, we would pull up those issues," Key said. "Where there have been claims made about reprisals in relation to our trading relationship with China, we've sought assurances that wouldn't be the case and we're comfortable these individual trade issues are exactly that: individual trade issues and not part of a wider programme of retaliation against New Zealand."

"I understand the backdrop of the issue but people should be careful about joining dots. We certainly see this current issue with Zespri as a technical issue that could have arisen at any time. Yes, it's arisen at the moment, but we don't read any more into it than that."

It was inevitable, as the trade relationship with China deepened, that there would be a wider range of goods about which technical trade issues could arise, he said.

(BusinessDesk)

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