New Zealand-United Kingdom FTA
The elevation of Liz Truss as British Prime Minister is said to give New Zealand a “huge advantage” according to Trade and Export Growth Minister, Damien O’Connor. As British Trade Secretary, Truss had a part in negotiating the NZ-UK FTA, and had also applied for the UK to join the CPTPP.
Prime Minister Ardern also met with Prime Minister Truss while in London and said that the new Prime Minister was keen to see the free trade agreement brought to fruition.
Indo-Pacific Economic Framework
Minister for Trade & Export Growth, Damien O’Connor, joined a Ministerial meeting with the 13 other economies in Los Angeles to launch negotiations for the Indo-Pacific Economic Framework for Prosperity (IPEF).
In his statement, the Minister said “IPEF presents an important opportunity to establish new structures to improve the flow of goods and services as well as drive climate action.” And “Sustainability, inclusivity and resilience are embedded throughout the IPEF, which is what makes the Framework particularly attractive for New Zealand.”
New Zealand has joined the launch of negotiations for all four pillars; Trade, Supply Chain, Clean Economy, and Fair Economy.
Supply Chains and Logistics
While international shipping costs are softening (see below), New Zealand is not yet seeing any easing in cost pressures, this is because New Zealand has not been able to get back into a fixed-day weekly cycle. Bottlenecks in New Zealand have meant that schedule reliability here is much lower than the global average, with labour constraints, weather events, and vessel bunching all causing disruptions.
The Port of Tauranga’s expansion has been put on hold, with the hearing at the Environmental Court cancelled due to a Covid outbreak. This has pushed the hearing back to 2023. ExportNZ has written a letter of support for the project.
The Ministry of Transport has released a summary of the submissions made on their New Zealand Freight & Supply Chain Strategy – Link to the site here.
Global shipping costs are softening in some areas. The Global Supply Chain Pressure Index has fallen from a high of 4.31 in December to 1.47 in August – (the pre-Covid value of the index was 0.0). The softening in prices can be attributed to a slowing down in global economic growth.
Global schedule reliability is at 40 per cent (for the month of July) and had its first year-on-year improvement since the start of the pandemic. However, this is still well below normality (around 75-80 per cent).
The average delay for late vessels sits below seven days, another year-on-year improvement.
The availability into the West Coast of the US continues to be an issue, as is capacity into Africa, the Middle East, West Asia, and Australia. Labour strikes at the Port of Hamburg and Port of Felixstowe have also added pressure in Europe.
Credit: Sea Intelligence, August 2022
MPI: Modern Export Legislation for Food & Fibre Products
The Ministry for Primary Industries (MPI) is reviewing the way it regulates the exporting of food and other primary sector products. This is due to shifting market access requirements by our international trading partners. MPI is hoping to introduce legislation that can allow them to respond to foreign market access rules.
ExportNZ will write in support of Legislative Option One: Create new enabling export legislation for regulating the export of all food and other primary sector exports.”
However, we do so while registering a number of concerns raised to us, namely, Legislation and Compliance “Creep”, and cost burdens associated with new regulations.
MFAT: Trade and Labour Framework Review
The Ministry of Foreign Affairs & Trade (MFAT) and the Ministry of Business, Innovation, and Employment (MBIE) are reviewing the 2001 Trade and Labour Framework as part of the ‘Trade For All” recommended process.
The Discussion Document can be found here. Submission on this piece of work close at 12 midday on the 31st October 2022.
ExportNZ will be submitting on this consultation and would be happy to receive comments from members. Please email email@example.com.
BusinessNZ Performance of Manufacturing Index (PMI) & Performance of Services Index (PSI)
PMI: New Zealand’s manufacturing sector saw another lift in expansion for August, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for August was 54.9 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 1.4 points higher than July, and the highest level of activity since July 2021.
While the NZ PMI is looking perkier now, the same cannot be said for the manufacturing sector globally. In fact, the global PMI slowed further in August, to a bare 50.3, from 51.1 in July. This continues a deceleration that’s been in train since a high point above 60.0 around mid-2021, but which only became significant (in a below-trend sense) over the course of 2022. The good news is that the global PMI is not yet contractionary and is miles above the sub-40 levels that have tended to mark obvious recessions in the past. Still, it will bear monitoring in the months ahead.
PSI: Expansion levels for New Zealand’s services sector saw a sizeable uplift in August, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for August was 58.6 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was up 4.2 points from July, and the highest level of activity since April 2021. It was also above the long-term average of 53.6 for the survey.
Save the Date: Go Global 2022 – 9th November – Auckland, New Zealand
After a two-year hiatus, we are finally able to go ahead with Go Global once again!
Make sure to book the 9th November in your diaries and join us at the Cordis Hotel in Auckland for a great lineup of speakers discussing all aspects of exporting from New Zealand.
Keep an eye out through our website – https://www.goglobal.nz/ – for when registration opens and the programme is announced.