Trade update – October
October Trade Update
There is much happening. Let’s start with the really good news.
The UK and New Zealand Prime Ministers reached agreement in principle on the evening of 20 October on a FTA that liberalises all goods, makes services trade and investment rules more liberal and which addresses issues such as digital trade, environmental sustainability, gender, climate change, and how to make trade more meaningful for Māori.
We have to wait 15 years for some of the more sensitive agriculture products to reach full free trade, but that will be worth the wait. Beef, lamb and dairy products will enjoy progressively larger duty free access to the UK from year one. 97% of New Zealand’s existing exports go duty free on entry into force.
We don’t know the detail of the indigenous chapter (this is part of the detail that has still to be finalised), but it sounds as the though the ambition for this chapter is greater than the FTA with Taiwan – the only other FTA that has such a chapter.
Details of the agreement released so far along with media releases can be found here:
- AIP document and explainer: https://www.gov.uk/government/publications/uk-new-zealand-free-trade-agreement-negotiations-agreement-in-principle
- Ten key benefits: https://www.gov.uk/government/publications/ten-key-benefits-of-the-uk-new-zealand-free-trade-agreement
- Press release: https://www.gov.uk/government/news/uk-agrees-historic-trade-deal-with-new-zealand
- MFAT Summary: https://www.mfat.govt.nz/assets/Trade-agreements/UK-NZ-FTA/NZ-UK-AIP-Key-Outcomes.pdf
All up the Government is claiming that the agreement will boost New Zealand’s GDP by $1 billion.
The intellectual property agreement is interesting. New Zealand has agreed to extend the copyright term for authors, performers and producers by 20 years. This will make it easier for New Zealand to meet US demands should the US seek to rejoin CPTPP. And these copyright changes, along with the agreement in the Geographic Indications area appear to be moving New Zealand closer to what the EU is demanding in the FTA we are negotiating with them.
There is some mutual recognition in this agreement but this is largely going to benefit lawyers and architects.
An expanded working holiday scheme has been de-linked from the FTA. It seems that the UK did not want this to be a precedent for forthcoming negotiations with India and others. Expect an improved scheme to be negotiated separately over the next few weeks.
There is still hard work ahead for our negotiators and trade lawyers over the next few weeks to get this agreement finalised and signed late this year or early next. We want it to enter into force as quickly as possible.
The EU FTA was very much the focus of Minister of Trade and MFAT Deputy Secretary Vangelis Vitalis’s travel to Europe. It is too early to determine what impact this had on chances for a completion of this negotiation this year. A new negotiating round is now in preparation. Senior MFAT staff have indicated some optimism that good progress can be achieved in this negotiation before the end of the year.
There is talk of a possible visit to Europe by the Prime Minister. Clearly this would also focus on the FTA and would be very welcome.
China’s application to join CPTPP was quickly followed by an application from Taiwan. No other applications have yet been received.
Clearly the NZ-UK outcome brings UK membership of CPTPP a little closer.