New Zealand is a strong advocate for free trade and is signatory to a number of trade treaties.
New Zealand has a comprehensive free trade agreement (FTA) with the People’s Republic of China, which came into force on 1 October 2008. One of the most important features is a phased reduction and elimination of tariffs on 96% of New Zealand’s exports to China. The FTA contains rules to determine which goods qualify for tariff cuts and measures relating to customs procedures and cooperation, sanitary and phytosanitary provisions and technical barriers to trade. The Agreement also includes a comprehensive investment chapter, providing binding investor-state arbitration at the option of a qualifying investor.
The New Zealand-Hong Kong, China Closer Economic Partnership (CEP) came into effect in 2011 and complements New Zealand’s FTA with China by enhancing the potential for Hong Kong to be used as a platform for trade into Mainland China.
The CEP contains measures to improve business flows and promote cooperation in a broad range of economic areas of mutual interest, and is supported by legally-binding side agreements on labour and the environment that are in line with New Zealand’s broader objectives for sustainable development. A legally-binding side agreement was also secured to negotiate an Investment Protocol within two years of entry into force. This does not, however, appear to have been concluded.
ANZTEC – an Economic Cooperation Agreement with Taiwan – was signed in July 2013 and came into force in 2014. It provides for the immediate elimination of more than 70% of current tariffs on exports to Chinese Taipei, and for trade between the two signatories to eventually become tariff-free.
A set of trading agreements, known as CER, or Australia and New Zealand Closer Economic Relations, have been in place since 1983. These are now at a high level of maturity. Full free trade in goods was achieved in July 1990, four years ahead of schedule. Recent expansion of CER has included free trade in services, agreements to free up trade in areas such as aviation, and proposals to address taxation impediments to trade and investment. Both governments are embarked on a programme of further reforms to increase harmonisation. An Investment Protocol was signed on 16 February 2011 and entered into force on 1 March 2013.
On 1 January 2010, New Zealand and Australia entered into a free trade agreement with the 10 member countries of the Association of South East Asian Nations (ASEAN), representing a market of over 500 million people. The FTA includes the eventual removal of tariffs on 99% of New Zealand’s current exports to the four ASEAN markets of Indonesia, Malaysia, the Philippines and Vietnam.
New Zealand also has comprehensive free trade agreements in force with Singapore, Thailand, Malaysia and the ‘P4’ (New Zealand, Brunei, Singapore and Chile).
New Zealand has also concluded (but not yet signed) an agreement with the Gulf Cooperation Council (GCC), and has signed (but not yet ratified) a high quality agreement with South Korea, which is currently being reviewed by a New Zealand parliamentary select committee.
Agreements under negotiation
New Zealand is currently in negotiation with the US through the Trans Pacific Partnership (TPP) agreement to establish a free trade bloc. Other negotiating partners are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore and Vietnam.
New Zealand is also engaged in negotiations to conclude a Regional Comprehensive Economic Partnership (RCEP). The RCEP is an FTA negotiation among 16 countries: the 10 members of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Viet Nam) and the six countries with which ASEAN has existing Free Trade Agreements (FTAs) – Australia, China, India, Japan, Korea, and New Zealand. RCEP countries account for approximately 60 per cent of New Zealand’s goods exports.
New Zealand is also in FTA negotiations with India and Russia-Belarus-Kazakhstan and is exploring with Japan the concept of entering an FTA with that country.
Information on New Zealand’s international trading agreements can be found on the Ministry of Foreign Affairs and Trade website: www.mfat.govt.nz