Trade Update – July

It has been a relatively light month for New Zealand trade policy in terms of actual negotiations. But it has been an interesting month globally.

The focus has been on consultation on the WTO Trade in Services Negotiations and on the development of a new trade strategy.

The need for this strategy is far from clear. It maybe that it was assumed that with the conclusion of the existing negotiating agenda, with 90% of our exports being traded under a bilateral or regional FTA, there would be no need for new negotiations. This of course assumes that we see TPP enter into force and that we complete the FTA with the EU. In those circumstances maybe our trade focus should move from problems at the border to problems behind the border.

But the 90% FTA coverage seems a bit heroic as an assumption. There is doubt over TPP. If it is not ratified in the so-called lame duck period (after the US Presidential election and the inauguration of the next President and Congress) the agreement clearly has a challenge. Donald Trump says he will not implement it and Hillary Clinton says that she will re-negotiate it.

Assurances have been made by European leaders that our FTA with the EU is on track but that too faces major challenges. Will Britian be in or out of the negotiation? What will the balance of forces be inside the EU if the EU is not part of the negotiation? And, now that the EU is sending its FTAs to each Member State to ratify, how much chance is there for New Zealand agriculture products to achieve meaningful liberalization?

Where are we with the FTA with the GCC?

There is no progress in the FTA with India. And positive rhetoric aside, the Economic Cooperation Framework Agreement is years away from a comprehensive outcome (a more modest outcome might be possible more quickly).

And without TPP we will still not have free access to Japan, Canada, US, Japan and Peru.

And what about the UK? Australia has offered to negotiate a FTA – have we?

Finally, where is the much talked about negotiation with China on upgrading the 2008 FTA?

It seems that we have plenty of work still to do on actually getting our existing negotiating agenda finished, rather than investing huge effort in developing a new strategy. Business New Zealand and Export New Zealand is very supportive of our existing strategy and wants to see good conclusions achieved in each of these negotiations.

On the Export New Zealand front we have submitted on the TPP implementing legislation. We need to pass this to participate in the agreement should it enter into force. We have also been assisting the Australian and New Zealand Governments determine a possible agenda for the development of the CER Agreement.

22 Jul, 2016
| News

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