New Zealand - Pacific Alliance FTA
New Zealand has announced that we will begin free trade negotiations with the Alianza del Pacifico (the Pacific Alliance).
The Alliance (external link) is a regional initiative established in 2011 by Chile, Colombia, Peru and Mexico. New Zealand has a long-standing relationship with the Alliance and with each of its members. We were one of the first to become an observer country in 2012. Once negotiations are completed, we will become an associate member.
We share a lot in common with the countries of the Alliance – we are all significant agricultural producers and are all committed to an open trading environment.
The cost of tariff duties on current exports to the Alliance is around $69.5 million annually. By eliminating these tariffs and other barriers, a free trade agreement will make it easier for New Zealand companies to do business with Alliance countries. It also has the longer-term potential to open up business with other countries in Latin America – a region with significant growth potential for New Zealand exporters.
The Pacific Alliance represents a strong potential market for New Zealand goods and services exports. It is the world’s sixth largest economy when taken as a bloc and is home to 221 million people.
A free trade agreement with the Alliance will establish a modern, comprehensive foundation to grow business opportunities in areas ranging from agriculture to machinery, manufactured goods, services, and investment. It will also level the playing field for New Zealand companies exporting to the Alliance market and vice versa.
In 2016, New Zealand exported $722 million worth of goods and services to Pacific Alliance countries. Total imports from the Alliance were $455 million in that year. Dairy is the most important goods export, but services exports such as tourism and education have a lot of potential.
New Zealand is looking to expand and diversify our export markets. We are also aiming to have 90% of our exports covered by free trade agreements by 2030. An agreement with the Pacific Alliance will be an important step towards both of these goals.
Trade Agenda 2030 explains more about New Zealand’s trade plans.
What is the Pacific Alliance (external link)?
More information on recently concluded New Zealand free trade agreements is also available.