August Trade Update
August Trade Update
NZ EU FTA
It is clear that a political agreement is necessary on the EU side on the level of access that the EU is prepared to offer. As a consequence, the EU side is not really wanting to engage with New Zealand until after the election here. The EU Trade Commissioner wants to know who he will be dealing with here at a political level in the next Government. So the delay in the election until October and the delay in forming the Government until mid-November (the last day for the return of the writ is 12 November so the new Government cannot be sworn in until after that date even if we have a very clean result) will probably delay this negotiation.
NZ UK FTA
It is early days in this negotiation. The first round in July went well but this was not really a negotiation on detail – more the parameters for negotiation. The next round was set down for October but the delay in the election may upset this timing also.
RCEP
It seems that legal rectification of the RCEP Agreement has been complete and Governments are preparing for a November signing of the Agreement. Unfortunately, India will not be part of the process. Japan has tried hard to encourage a re-think by India but tensions in the relationship with China (also a RCEP member) do seem to be spilling over into the trade and economic space and are a further reason for Indian reluctance. Without India joining RCEP will not really advance New Zealand access opportunities as we already have FTAs with all the RCEP members.
China FTA Upgrade and wider trading relationship with China
There is zero evidence to suggest that political differences over Hong Kong have had any impact on the New Zealand- China trading relationship. If China were to be retaliating an easy target would be the FTA Upgrade process, but all seems on track for a virtual signing in November.
Officials and Ministers are closely monitoring the China-Australia trading relationship where there is clear evidence of political differences spilling over into the trade area. The most recent evidence of this is the opening of a Chinese anti-dumping investigation into Australian wine (China is Australia’s largest export market for wine).
AANZFTA
Work is beginning on an upgrade to the Australia, New Zealand and ASEAN FTA. This has been impacted by COVID-19 but virtual negotiations are possible as early as November.
Global economy
As many of our major trading partners EU, US, Japan, Korea and Australia experience a second wave of COVID-19 infections there is growing evidence that the virus is impacting international trade. To date New Zealand food and beverage exports have held up well. MFAT are preparing regular updates on the impact that the virus is having on major markets and the global economy.
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