Trade Update - August 2013
Date Added: 13 Aug 2013 from BusinessNZ
The big new this month is the resumption of negotiations with Korea. A comprehensive FTA with Korea would be almost double the value of the recently signed agreement with Taiwan, so would be further very good news for New Zealand exporters.
The Prime Minister can be very pleased with the outcome of his talks with the South Korean President that have unblocked this process – dormant now for around two years.
The negotiations on the New Zealand side are to be headed by experienced negotiator Martin Harvey. The first round of negotiations in the resumed process will be held in October.
We caution that resumed negotiations do not guarantee an outcome. Indeed, trade strategists in Wellington worry that South Korea might prefer to keep the process on the back burner with New Zealand and Australia to maintain leverage over possibly joining the TPP process. If the FTA outcomes with Australia and New Zealand are completed there will be less incentive for these two key TPP players to push for the ROK’s inclusion.
The Parliamentary process for the Taiwan agreement is drawing near, with the Select Committee hearings completed last week. There were strong submissions of support from BusinessNZ and many sectors. The only opposition came from academic Jane Kelsey who has invented yet another conspiracy theory to worry about. The agreement was supported very strongly by National and by Phil Goff from Labour who was very dismissive of the Jane Kelsey submission.
If the Taiwan process runs smoothly, this agreement could enter into force by 1 December.
Minister Groser is increasingly upbeat about prospects for an agreement on key principles and the overall framework for TPP at the meeting of TPP Leaders in Bali in October. Trade strategists are however questioning whether all TPP members are ready for a breakthrough at this meeting. They point to Canada, which still seems to be down-playing chances for the process, and which seems to continue to believe that leaders will accept a non-comprehensive outcome (eg one that allows the exclusion of rice, sugar and dairy).