January Trade Update
Date Added: 4 Feb 2014 from BusinessNZ
Those questioning the value of free trade agreements should look carefully at the results achieved by a few of New Zealand’s agreements. Trade with China has grown spectacularly since the FTA came into force, and in its first month of entry into force of the NZ-Taiwan FTA, trade with Taiwan grew 37% when compared to the December 2012.
There may be more good news in 2014.
Korea and Australia finalized their FTA in December. This is potentially very good news for New Zealand as Korea has assured our Government that New Zealand will not be disadvantaged by this deal. Exporters should not, however, expect New Zealand to do better than Australia has done on the terms of the agreement. Should we ask for more than Australia has been given, Korea would be expected to push back and delay conclusion to negotiations.
Russia’s Deputy Trade Minister has suggested that there will be an outcome this year to the FTA negotiation with New Zealand. This is good news. New Zealand negotiators seem to be downplaying prospects – perhaps because upbeat forecasts in the past have appeared to mislead. Dairy remains the sticking point for this negotiation.
Gulf Cooperation Council
There are suggestions in Wellington that an outcome from the long delayed FTA with the Gulf Cooperation Council may be in prospect. Minister McCully has apparently had good meetings in the area. Minister Groser may be about to make a follow-up visit.
TPP faces two major hurdles. The US needs to send a clear message to Japan that excluding agriculture is not possible. The second is that the US Administration needs to get a negotiating authority from Congress. Without this any agreement would be subject to line by line review. Negotiating partners are just not prepared to finalize agreements with the US unless they can be sure the US will not seek to re-negotiate the agreement. This is a hot topic in Washington at present and the debate is worth following. The opposition to a negotiating authority by Senate Majority Leader Harry Reid was most unhelpful.