New Zealand primary exporters urged to stay nimble

His advice follows the unprecedented shakedown in the geopolitical order, fuelled by significant policy changes by the US.

Petersen has joined the chorus of international trade experts who say NZ will inevitably get caught in the crossfire from trade wars between the US, China and others. He says our exporters will have to be ready at a moment's notice to deal with what might happen.

He says the good news is that our exporters have an excellent track record in dealing with changes and the agility to move quickly to keep trade flows going.

He says there is no question that the US is reasserting itself and a lot of this is seen as quite reactionary and based on the ideal of 'America first'.

"To be honest there would be a lot of people who would support that. Even if you look at the defence spending in Europe, I think the US has carried the defence umbrella for Europe over decades and in the US that is no longer considered acceptable. So in some ways I can understand why they are doing it, but the problem is that it is going to cause some chaos in the world and there will be some measures taken by the US that will impact on us, even though they are not aimed at us directly," he told Rural News.

Petersen says the US alignment with Russia is as much about China as anything else. He says the dual importance of Chinese and US markets to NZ means our politicians and trade negotiators are going to have to tread delicately and keep a foot in both camps.

He says while this whole situation may look concerning for farmers, they should not worry and keep focused on doing what they are good at and leave the diplomacy to the experts.

"We have very good people in place around international trade and geopolitics. But as a small country we don't have 'hard power' in NZ like weapons. But we are very effective diplomatically with 'soft power' - the ability to negotiate extremely effectively. My message to farmers is stay calm and don't waste energy on what you can't control," he says.

On the domestic front Petersen says while many farmers feel they have a friendly government which is helping to boost confidence, they also need to be aware that the Government has a big picture agenda as well.

He says while some farmers are calling for NZ to walk out of the Paris Accord on climate change, he doesn't believe there is any chance of the Government doing this. He says NZ as a small country doesn't have the luxury of walking out of major multilateral agreements and says if we did there is a high risk that the 'big people' in such agreements could take action to stop us entering their markets. Petersen says he doesn't have concerns about climate change targets, saying it's nothing that science and innovation can't take care of.

"But I also believe that over the next 18 months, some farmers will potentially be frustrated by this present Government, especially around climate change," he says.

Petersen says on the positive side, he's really encouraged by the Government's economic growth message and says that will be helpful to the primary sector, along with the Government's emphasis on greater fiscal discipline.

As for what might happen at the Reserve Bank with the sudden departure of Adrian Orr, Petersen says any change will have minimal effect on the primary sector. He says the common view was that Orr's decisions on inflation were wrong and the new governor will be more sensitive to concerns around this issue.

"I expect going forward the approach will be more moderates," he says.