September Trade update
Thanks to the forthcoming election there has not been great progress in key negotiations. But the importance of the export economy has been highlighted by recently released trade statistics which show continuing growth in exports even though some key markets are still struggling with COVID-19. China, Korea, Taiwan and the UK are standing out for their strength. Unfortunately the UK is buckling down for the second wave of COVID-19 infections. And Brexit remains a risk in that market too. Aircraft heading for a long stay in the US deserts are showing up as exports so this is distorting exports to the US.
Regional Comprehensive Economic Partnership (RCEP)
It seems that RCEP remains on track for signature in November. Unfortunately Japan and others have had to give up on attempts to encourage India to reconsider its position and sign on to the agreement. Unfortunately for New Zealand RCEP will achieve little new market access as we have FTAs with all members already. And because of its size, and because of difficulties negotiating with India, market access provisions in RCEP were relatively less ambitious than existing agreements.
This is however the first agreement linking many of the participants and is positive at a time when the WTO system, and dispute settlement system is under so much pressure.
The Pacific Alliance (Mexico, Colombia, Peru and Chile) negotiations with New Zealand, Australia and Singapore have been dormant for some time. Domestic political challenges have been a problem in several members over the past year. But we are hearing whisperings of renewed interest in this negotiation. We will hopefully have more to report next month.
The UK Government has been trumpeting major developments with regard to the UK potentially joining CPTPP. A virtual meeting was held with CPTPP members by UK Minister Liz Truss. This was followed up by a question and answer session with senior officials. But the UK has not submitted a request to join and no such request is expected until the second quarter of 2021 at the earliest.
Several CPTPP members have previously expressed reservations about UK membership. Japan was one of the more vocal of these. This seemed to be a tactic to gain leverage in the Japan-UK FTA negotiations. These are now completed and Japan now seems comfortable with UK membership next year.
Expectations of a Thai application for membership are growing.
UK and EU FTAs
There have been no formal negotiations since our last report. The delayed election is likely to delay the next round of EU negotiations. Phil Hogan has had to resign as EU Trade Commissioner. The new Commissioner has some political decisions to make on the agriculture market access to New Zealand if this negotiation is to progress.