Overview
New Zealand’s free trade agreement with the United Arab Emirates – the Comprehensive Economic Partnership Agreement (NZ-UAE CEPA) – brings significant benefits for New Zealand in the dynamic UAE market, a gateway for the wider Gulf region. Read on for an overview of benefits of the Agreement, across each chapter.
Trade in Goods
The CEPA eliminates 99 percent of tariffs on New Zealand’s exports (98.5 percent immediately on entry into force). Removing duties on New Zealand products will benefit New Zealand’s significant dairy, red meat, horticulture and industrial product exports. In addition, New Zealand wine will have the best available access to the UAE market, now and in the future.
Key benefits by sector are set out below.
| Sector/Products | NZ Exports to the UAE | Outcome |
|---|---|---|
| Dairy products | $707 million | Tariffs Eliminated Immediately on Entry into Force (EIF) |
| Industrial Products | $242 million | Immediately at EIF |
| Horticulture | $47 million | Immediately at EIF |
| Red Meat | $46 million | Immediately at EIF |
| Wine | $7 million | 10% tariff reduction; any future liberalisation extended to New Zealand |
| Poultry | $3 million | Tariffs Eliminated over 3 Years from EIF |
Rules of Origin
Modern rules of origin provisions have been secured for New Zealand exporters through the CEPA. The NZ-UAE CEPA rules of origin are similar to other New Zealand FTA’s, making it easier for New Zealand exporters to understand and comply with the Agreement. The Agreement is also forward looking, promoting the use of electronic systems to further enhance trade. The chapter helps keep compliance costs down by enabling approved exporters to self-declare the origin of their goods from entry into force, with a commitment to extend this to all traders in future if agreed with any other party, plus a review clause.
Customs & Trade Facilitation
The CEPA will increase cooperation and information sharing between the customs agencies of New Zealand and the UAE. The Customs and Trade Facilitation chapter ensures that customs procedures are applied in a way that is predictable, consistent and transparent. Improved trade facilitation will reduce costs through streamlined paperwork and faster transit times at the border. The Agreement establishes the expectation that goods will be released by Customs immediately on arrival, with the maximum release time for perishable goods being six hours.
Trade Remedies
The Trade Remedies chapter ensures that New Zealand businesses are protected from unfair trade practices and appropriately maintains the rights that ensure New Zealand industry can compete domestically and internationally. It ensures New Zealand’s ability to use trade remedies in accordance with World Trade Organization rules and includes a commitment to promote transparency and best practice in trade remedy investigations.
Sanitary and Phytosanitary Measures (SPS)
The SPS chapter ensures New Zealand exporters can export with confidence into the UAE market. The NZ-UAE CEPA codifies and incorporates two equivalency arrangements signed in 2016, annexed to the SPS Chapter. These that recognised New Zealand’s regulatory controls as achieving the outcomes required by UAE legislation. This reduces costs and facilitates trade for our primary sectors with no additional food safety and biosecurity regulatory controls and requirements to export into this valuable market.
Technical Barriers to Trade
Trade between New Zealand and the UAE will be made easier with this CEPA reducing regulatory barriers. The CEPA facilitates the reciprocal recognition of requirements that New Zealand and UAE products, services and people need to enter the other market, reducing costs for exporters and facilitating goods trade.
Investment
The CEPA Investment Facilitation chapter, and the Bilateral Investment Treaty (BIT) concluded alongside it, provide a framework to broaden and strengthen our investment relationship, and promote economic cooperation between New Zealand and the UAE. Together, these provisions create the conditions for increasing two-way investment with the UAE.
The conclusion of a BIT will help promote and facilitate investment, providing investors in both countries with clear rules, while ensuring New Zealand is able to regulate into the future. This includes key exceptions such as New Zealand's Treaty of Waitangi exception, policy space for the operation of New Zealand's overseas investment screening regime, as well as the exclusion of Investor-State Dispute Settlement (ISDS).
Trade in Services
The New Zealand services sector, one of the fastest growing parts our economy, will be able to compete on a comparable basis with its competitors through this future-proofed CEPA. The Trade in Services chapter will provide our services exporters with transparent, non-discriminatory rules that will ensure a level playing field. These outcomes will provide greater certainty for New Zealand and UAE services exporters when operating in or seeking to enter our respective markets.
The chapter includes commitments for a wide range of sectors of commercial interest to New Zealand. These include professional services, education services, and the audio-visual and gaming sectors, as well as engineering and environmental services.The CEPA future-proofs New Zealand’s position in the UAE services market for a number of key sectors of interest to New Zealand service providers, ensuring that any advantages the UAE provides to future CEPA partners in those sectors will automatically be extended to New Zealand’s service providers. New Zealand has committed to do the same for the UAE.
The CEPA also contains temporary entry commitments, ensuring New Zealand businesspeople and specified service suppliers are able to operate in the UAE market, and that we New Zealand can access UAE expertise to help upskill and develop our export sectors.
Digital Trade
The digital trade rules in the CEPA mirror many of the high standard rules agreed in the Digital Economy Partnership Agreement (DEPA). These high standard rules are designed to provide greater certainty for businesses and consumer to facilitate trade. The rules address the movement of data and digital products across borders and the use of digital technology to facilitate both services and goods trade. The CEPA rules also confirm important standards on privacy, consumer protection and SPAM to help encourage participation in the online economy, and promote digital technology to improve the delivery of government services. Importantly, the chapter protects the right to regulate in public policy areas and, in particular, to meet obligations under the Treaty of Waitangi.
Government Procurement
The Government Procurement chapter will provide New Zealand businesses with guaranteed access to UAE central government procurement opportunities on a reciprocal basis. The chapter includes commitments to fair, competitive and transparent procurement processes, aligned with international good practices in procurement.
Competition
The CEPA facilitates economic efficiency and consumer welfare through promoting open and competitive markets. It requires New Zealand and the UAE to have competition laws that prohibit anti-competitive conduct, and authorities responsible for enforcing competition laws. This provides certainty that the benefits of increased trade with the UAE will be protected against anti-competitive conduct.
Intellectual Property
The CEPA confirms important intellectual property (IP) rules from New Zealand’s existing agreements, including the WTO Agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPS) that set out balanced intellectual property protections, providing certainty and supporting or innovation- focused exporters and investors, while also recognising the interests of IP users and the general public. The CEPA rules do not require any changes to New Zealand law, while also protecting New Zealand’s right to regulate, including in relation to genetic resources, traditional knowledge and traditional cultural expressions.
Trade and Sustainable Development
The Trade and Sustainable Development chapter promotes sustainable development policies and outcomes, recognising the importance of using labour and environment laws for legitimate purposes, effectively enforcing these laws, and not weakening them to encourage trade and investment.
The CEPA recognises the importance of addressing climate change and promoting trade and environment, including sustainable agriculture, forestry and fisheries. It will support women’s economic empowerment through fostering women’s entrepreneurship and sharing information.
On labour rights, the CEPA recognises the importance of adopting and maintaining the ILO Fundamental Principles and Rights at Work. It facilitates cooperation on eliminating all forms of forced or compulsory labour, and steps to encourage enterprises to adopt responsible business conduct policies.
Small and Medium-Sized Enterprises
This CEPA recognises the important role of the private sector, in particular SMEs, to drive economic growth, innovation and sustainable development. The Small and Medium-Sized Enterprises Chapter encourages cooperation between New Zealand and the UAE to support small business infrastructure, such as incubators and accelerators, promote the participation of women and youth-owned start-ups participation in international trade and support SMEs’ participation in digital trade and e-commerce.
Economic Cooperation
The Agreement promotes economic cooperation in a range of areas, and incorporates those included in other chapters. This chapter provides for meaningful engagement across various sectors of the economy.
Legal and Institutional Framework
The CEPA includes chapters which provide for its legal and institutional framework. These chapters facilitate the structure of CEPA committees, transparency and State-to-State settlement of disputes. The CEPA also secures exceptions to ensure both governments can continue to regulate in the public interest.
The Treaty of Waitangi exception, included in all of New Zealand’s contemporary FTAs, allows the New Zealand Government to implement domestic policies that accord more favourable treatment to Māori, including in fulfilment of its obligations under the Treaty of Waitangi, provided that such policies do not constitute a means of arbitrary or unjustified discrimination or a disguised restriction on trade.