8 Aug 2018

US stance on Iran won't apply to NZ - David Parker

9:00 pm on 8 August 2018

The government is confident the United States' tough stance on all firms doing business with Iran will not apply to New Zealand.

US President Donald Trump gestures as he addresses a press conference on the second day of the North Atlantic Treaty Organization (NATO) summit in Brussels.

US president Donald Trump. Photo: AFP or licensors

Having re-imposed sanctions against Iran, US president Donald Trump tweeted that other nations should follow his lead, warning that any country doing business with Iran would not do business with the US.

Trade Minister David Parker said agricultural exporters should escape punishment, as US guidelines set out in 2013 exempted food from the sanctions.

"His (Trump) tweet was released contemporaneously with their more detailed policy.

"We want New Zealand companies that can legitimately trade with Iran to continue to do so, and the advice that I have had from MFAT (Ministry of Foreign Affairs and Trade) is that humanitarian goods can be traded, including medicines and food," Mr Parker said.

But, National trade spokesperson Todd McClay said firms were likely to stay away from Iran.

"Any uncertainty for a business is not good."

"With the US saying they're going to sanction or target countries or companies that trade with Iran, even though it's legal, is too much uncertainty for New Zealand businesses," Mr McClay said.

National MP Todd McClay 21 Feb 2018

Todd McClay Photo: VNP / Daniela Maoate-Cox

New Zealand exports with Iran rose by 51 percent to $173 million in the June year compared to the previous year, with dairy products accounting for 86 percent of that. Butter sales stood at $140m.

In return, New Zealand imported $6m worth of goods, mainly dates.

Fonterra is a big dairy exporter to the region, but refused to comment.

Dairy Companies Association executive director Kimberly Crewther said the industry was taking Mr Trump's threats seriously.

"To date there has been been no impact on New Zealand's dairy trade to Iran.

"But we are mindful that there might be additional complexities that might start to flow through, including around the shipping routes," Ms Crewther said.

There were signs shipping companies were changing their routes to avoid sanctions, she said.

Shipping firm Maersk had said it would respect the US stance, and had gradually stopped accepting commodities that were now coming under the sanctions.

Meat exports to Iran were small in comparison to dairy, with sheep meat sales totaling $750,000.

Red Meat Industry Association trade and economic manager Sirma Karapeeva said New Zealand companies wanting to trade with Iran needed to do so with their eyes wide open.

"There are no technical reasons why they shouldn't be trading into Iran, but it has to be a commercial decision made by each and every company that chooses to enter into that market."

ASB rural economist Nathan Penny said overall Iran was a tiny part of the $55.5 billion in goods shipped overseas from New Zealand in the June 2018 year.

"Although [Iran] did have some potential this may stunt that potential going forward.

"But at this stage it's not going to impact too much given that we haven't really been able to get back into the Iranian market given the short duration since the embargo has been lifted."

International Business Forum executive director Stephen Jacobi said Mr Trump's provocative approach would bring it into conflict with the European Union, which is moving to protect its firms that do business in Iran.

He said it was another setback for open markets.

"We are looking at a ticking trade time bomb.

"The future outlook for trade is looking very dicey and New Zealand needs to be doing all it can to shore up its position in these troubled times."

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