The Trans-Pacific Strategic Economic Partnership (P4) Agreement between Brunei Darussalam, Chile, Singapore, and New Zealand is the first multi-party free trade agreement linking Asia, the Pacific and the Americas. It is also New Zealand's first trade agreement with a Latin American country.
The P4 agreement, which stands for “Pacific 4”, came into force in 2006. Under P4, most tariffs on goods traded between member countries were removed immediately, with remaining tariffs phased out. Other P4 measures to facilitate trade in goods cover rules of origin, quarantine rules and technical barriers to trade.
P4 also includes measures to open up trade in services as well as opportunities to compete for government procurement contracts. The agreement promotes cooperation on customs procedures, intellectual property and competition policy.
As part of the overall package, the members of P4 became party to binding agreements on environment cooperation and labour cooperation. These agreements create a forum to promote sound environment and labour policies and practices.top of page
The P4 negotiations were launched by Chile, Singapore and New Zealand at the APEC Leaders' Summit in 2002. After attending a number of rounds as an observer, Brunei joined as a “founding member” for the fifth round in 2005.
Most of the negotiations were concluded by 2006, although those on Brunei’s services and government procurement scheduled took place in 2008. Because of the small size of its economy, Brunei was given some flexibility in implementing commitments on services, government procurement and competition).
Various implementation activities have put the provisions of the FTA into practice so that businesses can take advantage of them.
The countries negotiating the P4 agreement aimed to provide a high-quality vehicle for economic integration in the Asia-Pacific region. This means that the P4 agreement was designed so that other countries could later come on board. In 2009, negotiations were launched to expand the agreement beyond its original four members. The shortened Trans-Pacific Partnership (TPP) title is being used for this process.
When it came into force, P4 eliminated duties on 92 percent of New Zealand's exports to Brunei and 90 percent of New Zealand's exports to Chile. Brunei’s remaining tariffs on New Zealand's exports will be phased out by 2015 and Chile’s by 2017. In return, New Zealand will phase out all its tariffs by 2015. Under the NZ-Singapore CEP, tariffs between New Zealand and Singapore are already zero.
P4 provides for comprehensive tariff elimination among all four countries with the exception of some products (alcohol, tobacco and firearms) imported into Brunei (on moral, human health and security grounds). There are no quotas and only very limited use of special transitional safeguards to redress any serious injury caused to a party by any sudden increase in exports during the period of tariff reduction or removal.top of page
Many New Zealand services suppliers have gained quota-free access to the Chile and Singapore markets, and an ability to operate in Chile, Singapore and Brunei on the same basis as domestic suppliers. P4 includes a Most Favoured Nation (MFN) treatment clause, which means any beneficial commitments that member countries’ make in future FTAs are automatically received by services suppliers from P4 countries. This prevents the competitive benefits of P4 from being eroded.
P4 also facilitates greater recognition abroad of New Zealand's qualifications and professional registrations. The four member countries are giving priority to enhancing the recognition of architects, accountants, engineers, geologists, geophysicists and planners.
New Zealand businesses will be on a much firmer footing to compete for government procurement contacts, particularly in Chile, where we don’t have any existing commitments. New Zealand businesses will be treated exactly the same as domestic companies when tendering for government procurements by specified entities worth more than NZ$100,000 for most goods and services, and NZ$10 million for construction services. The partners have also committed to follow general procedures for open tendering that will improve transparency. These procedures are consistent with New Zealand's own government procurement guidelines.
The P4 Agreement includes a robust and transparent dispute settlement mechanism with provision for an arbitral tribunal should consultations fail. Parties have committed to a general review of the Agreement two years after it enters into force and then every three years afterwards.
Accompanying P4 is a Labour Cooperation Memorandum of Understanding that affirms the parties’ commitment to the principles of the ILO Declaration on Fundamental Principles and Work and its Follow-up (1998). The Memorandum aims to improve understanding and encourage dialogue on labour matters, as well as promoting sound labour policies and practices.
Similarly, an Environment Cooperation Agreement encourages sound environmental practices and aims to increase each country’s capacity to address environmental matters through cooperation and dialogue.
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The existing NZ-Singapore CEP, which dates from 2001, remains in force. In an arrangement between New Zealand and Singapore, exporters from both countries will be able to choose the better of the treatment afforded under either the earlier NZ-Singapore CEP or the later P4 Agreement. This is designed to ensure that no trader is left worse off.
If you would like further information about the main P4 Agreement, please contact:
Post: Americas Division
Ministry of Foreign Affairs and Trade
Private Bag 18-901
Phone: +64 4 439 8000
If you would like further information about the Environment Cooperation Agreement, please contact:
Post: International Climate and Environment Division
Ministry for the Environment
PO Box 10362
Phone: +64 4 439 7400
If you would like further information regarding the Labour Cooperation MoU, please contact:
Post: Director - International Services
Department of Labour
PO Box 3705
Phone: +64 9 915 4000
If you would like to find out more about doing business in the markets covered by this agreement then please visit the NZTE website.top of page