Ministry Statements & Speeches:
We have seen the themes of trade loom large during the recent UK referendum on Brexit and in recent elections around the globe. In our own country, we’ve seen increased debate on free trade across the political spectrum, and some indications of a fracturing of the broad bipartisan consensus that has existed in this area for over a decade.
Importance of trade
With up to 600,000 New Zealand jobs linked, to trade these are matters that affect all of us.
Why do we negotiate trade agreements? High-quality trade deals support the growth, competition, innovation and productivity that create jobs and lower costs for consumers. Getting the best deal we can from international trade is vital for the New Zealand economy and the prosperity of all New Zealanders. The jobs of hundreds of thousands of New Zealanders depend on it.
But trade agreements have the potential to impact on more than just trade, so it’s important that everybody, not just exporters and importers, have access to accurate information on how trade agreements impact on the matters we hold dear.
Negotiating trade agreements on behalf of New Zealand has generally had two main parts:
Firstly - aggressively pursuing better access for New Zealand’s exporters.
Secondly - steadfastly protecting the Government’s right to regulate on issues of importance to New Zealanders.
The second point is as important as the first, and it tends to be the part which New Zealanders who aren’t involved in exporting are the most interested in. Such protections have always been part of trade negotiations.
Some of the issues which New Zealanders care about and which could conceivably be impacted by trade agreements include:
- jobs (not just future ones but existing ones)
- the environment
- the Treaty of Waitangi
- national security
- animal welfare
- affordable medicines
- labour rights
- investment
- intellectual property
- immigration
In each of these areas, trade negotiators are critically aware of the need to ensure that we preserve our - current and future - ability to create and implement good laws and regulations. For example, to protect jobs we seek longer tariff phase-out periods to give producers and manufacturers more time to adjust, and we seek rules to stop unfair dumping of goods.
To preserve the rights of Māori, we seek a Treaty of Waitangi exception so that successive governments can ensure that Treaty commitments and other policies in favour of Māori can be met.
No New Zealand FTA has ever resulted in the lowering of product, food safety, health, animal welfare and other standards. Rules are specifically designed to cover these issues, and wider general exceptions are always put in place to make sure of it.
The government is very committed to working ambitiously to negotiate new and better trade deals, but is equally committed to treading carefully and by considering our national interests in a holistic way.
A very important part of this equation involves explaining what we are doing to stakeholders and inviting their feedback, so that we can ensure that we have taken as broad a range of interests and objectives as possible into account, before we formulate our strategy and as we execute it across the negotiating table. This is one of the reasons that sessions such as this one tonight are so important.
Trade Agenda 2030
As a signal of the continued importance of trade to New Zealand, the Prime Minister launched the new trade strategy Trade Agenda 2030 on 24 March. The strategy sets the specific target of 90% of goods exports being covered by Free Trade Agreements by 2030. Trade Agenda 2030 outlines four ‘shifts’ in trade policy emphasis.
These are:
- Urgently expanding our network of Free Trade Agreements while maximising the benefits of existing agreements
- Increasing the focus on tackling non-tariff barriers (these are the kinds of barriers that have become more prevalent and evident as tariff barriers have come down – such as registration or certification requirements for exported goods)
- Increasing our focus on services, investment and digital trade
- Appropriately assisting New Zealand businesses to succeed overseas.
Another key part of the strategy is to engage with New Zealanders more on trade, their priorities and their vision for the future. That’s what we are here to do today.
Work is under way within government on developing details to help implement Trade Agenda 2030. For instance, the Ministry is working with other agencies to establish a ‘non-tariff barriers clearing house’ featuring a single online portal for exporters facing non-tariff barriers.
TPP 11
How are we going to achieve the ambitious goal that our Government has set for 90% of goods exported to be covered by free trade agreements by 2030? One of the important building blocks, that has come under threat with the US’ recent withdrawal, is the Trans-Pacific Partnership.
The Trans-Pacific Partnership has been concluded and ratified by New Zealand but cannot enter into force without the United States reversing its decision in January not to join the Agreement. Our preference is to have the US in Trans-Pacific Partnership, but we still see value in the Agreement without the US, given that it will still improve access for New Zealand exporters and lower tariffs in markets where we do not currently have FTAs like Canada, Mexico, Peru and, importantly, Japan, the world’s third largest economy. The regional nature of the Trans-Pacific Partnership is also valuable, since that it will create a common set of rules among a group of Asia-Pacific economies – which currently account for 31% of our total goods exports and 31% of our services exports – for our businesses to follow. The other 11 economies in that Agreement, including New Zealand, are therefore now talking about how to bring the Agreement into effect in the short-term. We hope to reach a decision on this by the end of 2017.
The TPP is an important building block in our trade strategy but it is not the only negotiation that we attach priority to.
Other agreements – AANZFTA, NZ-Hong Kong CEP, Singapore, GCC
Work is also under way to upgrade our other existing free trade agreements.
We are reviewing our free trade agreements with the Associate of South East Asian Nations (ASEAN), and our closer economic partnership with Hong Kong. These reviews will look at the performance of each of the FTAs and assess where these can be improved.
The government also announced in April 2017 that Singapore and New Zealand will be developing an Enhanced Partnership. The Singapore Enhanced Partnership will include an upgrade of our existing bilateral FTA. Given that we already have three agreements with Singapore, this upgrade will largely be strategic, but will also look at modernising the FTA framework to enable us to better address non-tariff issues, regulatory cooperation and looking at how we can further facilitate the movement of people between our economies.
Finally, Ministers McClay and McCully visited the Gulf in 2017 to press for a conclusion to a free trade agreement with the Gulf Cooperation Council. Early in 2017, New Zealand received a number of positive signals about the readiness of the Council to resume the process towards finalisation of the agreement. However, there remain several steps the Council needs to undertake, and the timeline for this is not yet clear.