The Prime Minister, as expected, travelled to Brussels en route to the NATO Summit in Vilnius and signed the FTA with the EU.
The Agreement now needs to be ratified by both sides but no officials or Ministers we speak to expect this to be a problem. New Zealand is about to change Ambassadors to the EU so is being careful to have the new Ambassador in place with a minimal gap to ensure a senior presence at all times to keep an eye on then process. We can’t mention names as these have not yet been announced formally.
There were suggestions that Australia might be about to finalise the Agreement that it is negotiating with the EU but negotiations fell over again. Negotiations on that Agreement look as though they will be continuing until at least the end of the year.
The EU outcome for New Zealand will see useful gains in many areas but it does not deliver the type of excellent outcome for meat and dairy as we saw with the UK, China and Taiwan.
With the EU outcome signed there remain only two major gaps in New Zealand trade architecture – the US and India. No one should anticipate any real liberalization with these markets but the Indo-Pacific Economic Framework which is being led by the US may deliver some gains on the trade facilitation side.
CPTPP Ministerial and UK Accession
July also saw the first new member formally join CPTPP. The UK signed the Accession Agreement at the CPTPP Ministerial meeting held and Chaired by New Zealand. The addition of another G7 economy to this Agreement is a major achievement and will encourage others to look at joining the Agreement. There are already six economies – China, Taiwan, Costa Rica, Ecuador, Uruguay and Ukraine – that have applied for membership.
Some useful work was done discussing Customs cooperation and digital trade along with finalizing terms of reference for a review of the Agreement. Unfortunately no progress was made on reaching a decision on how to handle the new accession applications. There are clearly differences in the room so the only thing members can agree on is doing nothing at this stage.
Ministers will meet again in the margins of the APEC Economic Leaders’ Meeting later in the year.
China Business Summit
Both the Prime Minister and Trade Minister O’Connor gave important speeches at the well-attended China Business Summit in Auckland earlier this week. The relationship with China is clearly in good shape and has benefitted from the recent Prime Ministerial visit. China is clearly seeing New Zealand in a different light to other five eyes members and seems to be appreciating the fact that New Zealand is more moderate in some of its criticisms of China than others. That said diversification is constant message from Government Ministers and officials. The Prime Minister had previously given a major speech on New Zealand’s foreign policy to the New Zealand Institute of International Affairs prior to his trip to NATO. Exporters can take some reassurance from reading these speeches – all are available on the www.beehive.govt.nz website.