McCully: NZ 'in a good space' to deal with Brexit

  • 28/06/2016
Foreign Minister Murray McCully (Reuters, file)
Foreign Minister Murray McCully (Reuters, file)

Foreign Minister Murray McCully says he was surprised by Britain's decision to leave the European Union but he had prepared the ground in advance to protect New Zealand's interests.

"We had spoken to the UK government about the sort of steps we would want to take, and the Europeans as well," he told reporters today.

"Obviously our trading interests are significant, and we were making sure we could talk to both parties in a frank and meaningful manner as they go through what will be a difficult set of discussions themselves.

"I'm comfortable we are in a good space to do that."

Mr McCully says the Europeans will be looking to ensure that while they have the distraction of discussions with the UK, it won't disrupt their normal business.

He hoped the timetable for New Zealand's negotiations with the EU on a free trade agreement would hold.

Asked whether he expected Britain would look to historic Commonwealth ties, Mr McCully said he would wait to see what the new leadership looked like.

"It's quite possible the new leadership does view the old Commonwealth ties as important, but that's going to be tempered by a sensitivity on migration issues that might make achieving some of the objectives more challenging - we might have to take that carefully."

In Parliament today, Finance Minister Bill English said financial market volatility following Britain's decision could have an impact on New Zealand.

He said market movements had so far been orderly.

"There is uncertainty in financial markets ... volatility is expected to continue in the short term at least and may have some impact on New Zealand," he said.

"We have, for instance, already seen the New Zealand dollar rise against the pound and fall against the US dollar."

Mr English said New Zealand businesses were accustomed to global uncertainty, which was "pretty much the norm" these days.

"Businesses, particularly exporters, were forced to become competitive when the exchange rate was 88 cents US, and they are now reaping rewards despite global uncertainty," he said.

"We see New Zealand companies with the confidence to continue to grow and invest, knowing they have the capacity to respond and adapt to the international economy as it changes."