There are very few strategic risks to New Zealand from our current levels of exposure to imports from China, concludes a new report from the New Zealand China Council, co-sponsored by NZIBF.
Britain here we come!
We are excited about the Agreement in Principle (AiP) on a future free trade agreement with the United Kingdom!
Some 139 years after the first refrigerated vessel left for the “mother country” and 48 years since Britain cast its lot with a united Europe, New Zealand and the UK are back in the business of freeing up bilateral trade and investment. This Agreement in Principle will clearly require more work, but both governments have put down a clear marker about their future intentions.
How did we get here?
We have written about this negotiation on several occasions each time reminding of the need for an ambitious, high quality and comprehensive outcome. Our 2018 report outlined the reasons why this agreement would be beneficial for both sides. Most recently we even said: “To be a champion of free trade, you have to believe in it. You have to believe that the benefits of opening your market outweigh any potential short-term pain”. Clearly the British Government, with its focus on “global Britain”, has absorbed this message and with an eye on future membership of the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) has sought to move forward with New Zealand as well as Australia as part of a longer game.
A good deal – both ways
We’ve often said – trade agreements and are only worth doing in the first place if they give rise to new trade and investment. The NZ/UK agreement would appear to reach a high and welcome benchmark in terms of comprehensiveness – tariffs are finally removed on all products within 10-15 years. That end point may be on the high side, but commercially meaningful access is provided, on entry into force, across all New Zealand’s key export sectors including dairy, meat (lamb and beef), horticulture, wine, honey and fish. This should translate into some big new opportunities for exporters – not enough to lessen the importance of China and Asian markets, but enough to make a difference to exporters’ market options.
Trade agreements and are only worth doing in the first place if they give rise to new trade and investment. The NZ/UK agreement would appear to reach a high and welcome benchmark in terms of comprehensiveness
Services are included, such as financial services and telecommunications of particular importance to the UK. The Agreement provides UK suppliers the ability to deliver services in New Zealand, and vice versa, as well as new facilitation for investment but does not provide what some may regard (mistakenly, we would say) as the infamous mechanism for investor state dispute settlement. In a significant concession, New Zealand has agreed to extend the copyright term by 20 years (to 70 years) but does not need to do so for another 15 years. We can expect a similar concession to be made in a future NZ/EU FTA.
Next generation trade
The agreement delivers the next generation of trade rules. On the one hand there are forward looking provisions in the digital space, reflecting the importance of the way interoperable digital systems enable goods trade today. On other hand both governments are at pains to show that trade agreements can be made to work for all and address global issues like environment and climate change, labour, the inclusion of women and Indigenous people. So, the UK and New Zealand have chosen in this putative agreement to go even further than previously and to set a high standard. Of particular note is that the Agreement is set to include an Indigenous trade chapter, as well as continuing of course to recognise the importance of Te Tiriti o Waitangi.
This agreement comes at a time when supply chains face extraordinary disruption. The global mood may be sombre, but concluding trade agreements is still possible, if governments put their mind to it. Although this negotiation has been conducted virtually, to the great credit of negotiators, there is nothing virtual about the value of the FTA for both New Zealand and the UK – that is, if agreement in principle is followed in due course by the final, signed and ratified agreement.
This post has been prepared by Stephen Jacobi, Executive Director of the NZ International Business Forum. An earlier version of this piece was published by Radio NZ here.
REGISTER WITH TRADE WORKS
Register to stay up to date with latest news, as well as saving and discussing articles you’re interested in.
Latest News
Sourcing from the world’s factory – new research report into imports from China
There are very few strategic risks to New Zealand from our current levels of exposure to imports from China, concludes a new report from the New Zealand China Council, co-sponsored by NZIBF. Even if we were to diversify our sources, China is now so...
ADDRESS TO THE 54TH ONE STOP UPDATE FOR THE ACCOUNTANT IN BUSINESS – GLOBAL ECONOMIC UPDATE
AUCKLAND, WELLINGTON, CHRISTCHURCH, MAY 2024 STEPHEN JACOBI, EXECUTIVE DIRECTOR - NZ INTERNATIONAL BUSINESS FORUM Introduction Thanks once again to Brightstar for the opportunity to address you today. I’m sorry I can’t be with you in person as I am travelling...
APEC Ministers Responsible for Trade Joint Statement 2024
2024 APEC Ministers Responsible for Trade Joint Statement Arequipa, Peru | 18 May 2024 We, the Asia-Pacific Economic Cooperation (APEC) Ministers Responsible for Trade (MRT), met in Arequipa, Peru on 17-18 May 2024, chaired by Peru’s Minister of Foreign Trade and...
Business Forum welcomes UAE FTA negotiations
Media release, 7 May 2024 The NZ International Business Forum (NZIBF) welcomes the start of formal negotiations on the New Zealand/UAE Closer Economic Partnership Agreement (CEPA) and looks forward to steady progress that will lead to the securing of a comprehensive...
Doubling our exports with zeroes…and ones!
The development of written language in the ancient world didn’t start with great poetry or literary epics. The catalyst for writing was the need to record the transfer of the ownership of goods from one person to another. Scribes did this by marking tablets of clay...
Asia-Pacific business leaders rally for robust global trade amidst rising protectionism
APEC NEWS RELEASE Issued by The APEC Business Advisory Council (ABAC) - April 2024 This week in Hong Kong, China, the APEC Business Advisory Council (ABAC) voiced serious concerns regarding the global shift towards protectionism and regional fragmentation, risking...
SUBMISSION TO THE MINISTRY OF FOREIGN AFFAIRS AND TRADE – APRIL 2024
NEW ZEALAND-UAE COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT NEGOTIATIONS This submission is made on behalf of the New Zealand International Business Forum (NZIBF), whose members are listed at Annex A[1]. NZIBF is a forum of senior business leaders working together...
NEW TEAM FOR AUSTRALIA NEW ZEALAND LEADERSHIP FORUM
Media release, 2 April 2024 The New Zealand Co-Chair of the Australia New Zealand Leadership Forum (ANZLF), Greg Lowe, welcomes the appointment of Stephen Jacobi and Simon Le Quesne to the New Zealand arm of the ANZLF Secretariat. The ANZLF brings business leaders,...
NZ/EU FTA A BONUS FOR SOME SECTORS – BUSINESS FORUM
Media release, 22 March 2024 The NZ International Business Forum (NZIBF) acknowledges the passage of the implementing legislation for the New Zealand/European Union Free Trade Agreement and looks forward to the FTA’s entry into force on 1 May. “This agreement was...
“MEAGRE OUTCOME” FROM WTO IN ABU DHABI – BUSINESS FORUM
Media release, 2 March 2024 Despite its overwhelming importance at the heart of the international trade system, members of the World Trade Organisation (WTO) have concluded their Ministerial in Abu Dhabi (“MC13”) with only a meagre outcome. NZ International Business...
To go or woe with the WTO?
We’ve been here before with the World Trade Organisation (WTO). The global trade body’s 13th Ministerial meeting (“MC13”) opens in Abu Dhabi on Monday 26 February, with Trade Minister McClay serving as Vice-Chair. In recent weeks diplomats, trade...
DCANZ – Agricultural Subsidy Distortions Must Be Addressed
23 February 2024 - Media Release by the Dairy Companies Association of New Zealand (DCANZ) As the world’s Trade Ministers head to a WTO meeting in Abu Dhabi, the Dairy Companies Association of New Zealand (DCANZ) is calling for an immediate capping of agricultural...
Asia-Pacific business leaders call for greater economic dynamism with people at the center of the APEC agenda
16 February 2024 - APEC NEWS RELEASE Issued by The APEC Business Advisory Council (ABAC) The APEC Business Advisory Council (ABAC), meeting this week in Kuala Lumpur, Malaysia, expressed deep concerns about the growing pressures of economic fragmentation and the risks...
SUBMISSION TO THE PARLIAMENTARY FOREIGN AFFAIRS, DEFENCE AND TRADE COMMITTEE – FEBRUARY 2024
NEW ZEALAND EUROPEAN UNION FREE TRADE AGREEMENT LEGISLATION AMENDMENT BILL Introduction and Summary This submission is made on behalf of the New Zealand International Business Forum (NZIBF) and Export NZ. NZIBF is a forum of senior business leaders working...
ABAC Statement on WTO MC13 – February 2024
Now, more than ever, the world needs a credible, relevant, and effective multilateral trading system, with the World Trade Organization (WTO) at its core. In this era of global challenges, the APEC Business Advisory Council (ABAC) recognizes that the WTO is...