Trade

Prime Minister could travel to Saudi Arabia if trade deal is revisited

Are we about to revisit our trade relationship with Saudi Arabia?

Sanctions on Russia have triggered issues with the oil supply and price, and we’re increasingly seeing countries re-engage with the Middle East, and in particular Saudi Arabia.

US President Joe Biden is in the middle east, fist-bumping the Saudi crown Prince. 

Rachel Smalley asked Democracy Project's Geoffrey Miller why Biden went to the Middle East.

"In a word, oil," Miller said.

Since Russia invaded Ukraine, global oil prices have skyrocketed and only Saudi Arabia can pump more oil into the market and bring prices down.

"Joe Biden has had to eat his words. He called Saudi Arabia 'a pariah' during the election campaign just a couple of years ago."

The GCC - the Gulf Cooperation Council - involves eight countries in the Middle East who collectively work together on economic, security and political issues.

Miller explained there has been a long-running saga with NZ trying to sign a deal with the GCC, and despite a deal being signed in principle in 2009, it has yet to be ratified by the Gulf.

"We are trying to diversify away from China, we've got that free trade deal with the EU but it wasn't a particularly good one for meat and dairy. 

"The Gulf countries is a very good market for the meat and dairy products."

He told Rachel if a deal is agreed upon the Prime Minister will more than likely need to travel to Saudi Arabia to sign it off, as she did for the free trade agreement with the EU.

"I think it is inevitable….it would be expected that she would head to the Gulf and the biggest country there by far is Saudi Arabia."

He noted that this deal could drag on for a few more years before an official agreement is reached.

Miller found the whole Pacific Islands Forum 'slightly underwhelming' in the end, he said it was still interesting.

"You had Kamala Harris, the US Vice President, essentially gate crashing this event which had been talked up as all about being Pacific unity without the great powers.

"Fiji, which was hosting the forum, invited Harris to address the summit virtually and it did make a mockery to some degree of the idea that this was about Pacific countries and not about the greater powers."

The best way Miller could describe the Pacific Islands Forum is as the 'first act of a long game'.

"The leaders did pass something they call the 2050 Blue Pacific Strategy and I think that may be the vessel through which the US and other Western countries increasingly funnel a lot more money into the Pacific.

"It's very much a question of watching this space."