The Northern Hemisphere is back up and running and there is plenty happening.
New Zealand Chief Trade Negotiator in the UK and Europe
MFAT Deputy Secretary Vangelis Vitalis is heading for the UK and will be participating in a public debate on 25 September about whether the UK should join CPTPP. We have secured a ticket to this event and will report on it, Brexit and the state of the UK-NZ FTA possibility in October.
China-US Trade Tensions Continue
President Trump says that he is poised to impose new tariffs on US$200 billion of Chinese exports. It seems that talks might be about to occur between China and the US to try and avoid this development but comments from President Trump seem to be casting doubt on whether these will occur.
Fear A Must Read For Trade Policy Wonks
Bob Woodward’s just published Fear paints an interesting picture of the divisions within the US Administration on trade policy. It is clear that President trump has been held back from some of his more extreme actions by senior officials. Unfortunately the ranks of those opposing the extreme protectionists are thinning…..
Talks at senior official level seem to have eased tensions between the US and EU. There is talk of some form of agreement on trade facilitation being achieved by November.
There is considerable energy going into the RCEP negotiation in an attempt to bring it to finality this year. It seems that New Zealand is willing to compromise on the quality of the market access it was expecting into India in an attempt to facilitate this agreement. But are China, Korea and Japan ready to finalise the market access regime that will apply between them?
CPTPP Entry Into Force
Chances of an early entry into force for CPTPP have risen with news that the Australian Labour Party will support ratification in Australia. Three countries have already ratified CPTPP (Singapore, Mexico and Japan). Australia and New Zealand would make it five. The Agreement comes into force when six members ratify the Agreement. There was some doubt about the position of the new Malaysian government but Prime Minister Mahatir has indicated that Malaysia will stay in the Agreement and ratify it.
New Zealand is well down the road to ratification. Being one of the first six to ratify may lead to immediate trade advantages.
Access in some products in some markets will be controlled by a tariff quota regime. Access to tariff quotas in countries that have ratified the regime will only be open to those who have ratified the agreement. So there is a potential market advantage to those who are early to ratify this agreement. For example, if New Zealand were to be one of the first six to ratify the agreement, but a competitor such as Canada were slower to ratify, we would have an advantage in accessing the Japanese market over Canadian exporters for the period where we have ratified the agreement and Canada has not.
Export New Zealand has strongly recommend to the Select Committee that New Zealand be one of the first six to ratify the agreement so that our exporters can exploit this opportunity.