From Our Blog
It’s more fun in the Philippines!
The Philippines was the exuberant hosts for this year’s series of APEC meetings in Manila.
The political backdrop was all about terrorism in Europe and the Middle East, growing concern about security in the South China Sea and rising concerns about the impact of dangerous climate change. All this would have given food for thought for the 21 Leaders including President Barack Obama and President Xi Jinping as they sat down for their retreat on 19 November.
Earlier in the week the economic issues were to the fore as Trade Ministers concluded their discussions and the region’s business leaders gathered at the APEC Business Advisory Council (ABAC) and then at the APEC CEO Summit. The focus was squarely on the Trans Pacific Partnership (TPP) and how it could be used once signed and ratified to build a Free Trade Area of the Asia Pacific (FTAAP) amongst the 21 member economies of APEC.
ABAC’s last meeting for 2015 was notable for the production of three reports – a study about new business issues that could be included in FTAAP, a detailed investigation about barriers to SMEs accessing e-commerce and an a analysis of the region’s most liveable cities in which Auckland ranks 6th out of 28 (but with some very low scores about affordability and connectivity). These reports will be posted to www.abaconline.org.
ABAC welcomed the conclusion of TPP but not without considerable debate –with those who think TPP falls short of the high quality agreement it was meant to be and with those who contend it sets standards that are too high for others in the region to follow. The NZ team made it clear that while TPP does not achieve all we hoped it would especially for dairy the deal overall is a very good one for us and for the region.
When ABAC Members (including Tony Nowell, Katherine Rich and Stephen Jacobi) sat down for Dialogue with Leaders, the emphasis was squarely on trade in both goods and services, the digital economy and the concerns of SMEs. It is particularly powerful way for business leaders to present these concerns directly to those responsible for the directing the course of the region’s economy.
The news has now broken that New Zealand has offered to host a signing ceremony for TPP. This reflects New Zealand’s role in initiating TPP in the first place and hopefully can show that when it comes to trade things can be fun in New Zealand too.
This post was prepared by Stephen Jacobi, an Alternate Member for the APEC Business Advisory Council.
TPP Contains Major Advances at Manageable Cost
At eleventh hour in Atlanta last week Ministers managed to conclude the long-running TPP negotiations. Members of the New Zealand International Business Forum (NZIBF) are both delighted and relieved.
The deal was without doubt a testament to the perseverance and skill of New Zealand’s negotiators, led by Trade Minister Tim Groser.
Early analysis of the detail released by the Government in the course of last week suggests that New Zealand’s trade interests look to be well served by substantial liberalisation in most sectors with the exception of dairy. The dairy outcome is certainly not what we hoped could be achieved but marks nonetheless a step forward with some useful access opened up in Japan and the United States. Tariff elimination is achieved over time for horticulture, wine and forest products in all markets. Significant new access, again over time, is achieved for beef, seafood and manufactured goods in Japan, the United States and Mexico. A range of services sectors get a major boost. Some useful provisions are included for wine labelling and medical equipment regulation and a range of provisions will improve supply chain connectivity , regulatory coherence and help address non tariff barriers. These are all major advances.
Contrary to the worst predictions we expect New Zealand’s adjustment arising from this agreement to be manageable. Pharmac is preserved; there are only marginal increases likely in the costs of medicine; New Zealand’s existing policy settings in intellectual property (with the exception of copyright term) are largely secured; the continuing right to regulate in public health, the environment and the Treaty of Waitangi is maintained; investor state dispute settlement will not apply to New Zealand’s overseas investment regulations, government services, fisheries quotas or tobacco measures; and New Zealand’s state owned enterprises will be subject to existing laws.
And for the first time ever for an FTA TPP contains some useful advances in environment and labour which should be welcomed by environmental organisations and unions.
Attention now turns to the ratification process in New Zealand and especially to the release of the text within the next month,which will allow us to assess the benefits and any possible costs on the basis of facts. NZIBF will engage in this process and hopes for the widest possible bipartisan support from New Zealand political parties
This post was prepared by Stephen Jacobi, Executive Director of the NZ International Business Forum (NZIBF). More information about the TPP Atlanta outcome is available at http://www.tpp.mfat.govt.nz.
TPP – on a midnight train to Georgia
TPP negotiators meet in the unlikely place of Atlanta this week in what some believe may be the last attempt to conclude these long drawn out negotiations. New Zealand has a lot at stake – access for dairy products to the highly protected and subsidised markets of the United States, Japan and Canada gets the most attention, but better trade and investment conditions for the other 75 percent of our exports and integration in an area representing 40% of global GDP are no less significant.
TPP was at the outset styled as an opportunity to craft a “high quality, ambitious and comprehensive” agreement. Yet the protectionist and anti-competitive forces, which are alive and well in some of the world’s largest economies, might yet succeed in ensuring a sub-optimal outcome. Although New Zealand played a key role in getting TPP underway in the first place, we simply don’t call all the shots in this complex negotiation. Trade Minister Groser has been open in admitting that success is not guaranteed at Atlanta.
Those opposed to TPP claim it will have all manner of negative effects on New Zealand, but the debate has been hopelessly one-sided in the absence of a completed agreement. Once an outcome is secured, hopefully in Atlanta or possibly at the APEC meetings in Manila in mid November, a properly informed debate can take place. New Zealanders can have their say in the Select Committee process which follows transmission of the final text to Parliament. MPs will get to vote on implementing legislation without which TPP cannot come into force.
The great baseball player and part time philosopher Yogi Berra left us last week aged 92. One of his great sayings was “it ain’t over till it’s over”. Never a truer word was said in relation to TPP.
This post was prepared by Stephen Jacobi, Executive Director, NZ International Business Forum. Posted: 29/09/2015
Think Europe as well as Asia
A decision about whether the New Zealand and the European Union will launch negotiations for a free trade agreement is expected later this year. A discussion paper prepared by the NZ International Business Forum outlining the case for a NZ/EU FTA is to be released at an event held in Wellington on 16 September.
Europe is already a very significant trade and investment partner for New Zealand: the EU is a top export market, second largest source of imports, and second-largest source of investment. Although the relationship is in reasonable shape, many New Zealand exports still face barriers, at the border or behind it, which add costs, generate uncertainty or in some cases even make trade uneconomic.
New Zealand should be trying to target European investment to match with NZ resources and know-how and then jointly market these opportunities using our network of FTAs in Asia. This will create new business, growth and jobs in areas such as agriculture and food as well as technology, services (including tourism, education, and environmental services), niche and high-value manufacturing, research and investment.
A copy of the discussion paper can be found here.
Background on the European Union and its trade policy can be found at: http://europa.eu/pol/pdf/flipbook/en/trade_en.pdf.
This post has been prepared by Stephanie Honey, Associate Director of the NZ International Business Forum.
APEC – inter-dependence, inclusiveness, integration
For New Zealanders APEC is normally something that happens in exotic locales like Vladivostok (2012), Bali (2013), Beijing (2014) or this year in Manila. New Zealand last hosted in 1999 and we will do so again in 2021.
APEC is the way the 21 governments of the Asia Pacific region seek to influence the growing inter-dependence of their economies through trade and investment, economic co-operation and capacity building. Unlike the WTO, APEC is a voluntary and non-binding instrument – it works on the basis of good ideas rather than rules.
This year’s APEC Chair, the Philippines, is promoting the concept of inclusive growth in which all members of society benefit. The initiative is being promoted through a range of different meetings of Ministers, officials, business people and stakeholders throughout the year culminating in the annual Summit in November. Last week Sanchia Jacobs from Auckland Council joined an APEC Mayoral Forum in Cebu looking at building liveable and competitive cities. This week Catherine Beard from Export NZ will be discussing how the region’s services industries can co-operate to improve the regulatory environment both for services providers and consumers. Later in the month Small Business Minister Craig Foss will participate in a Ministerial meeting on how to foster the health and vitality of SMEs.
It’s often said New Zealand’s future lies in the region we call our home. Even our traditional relationship with Europe is being seen through this lens as we discuss how to link European investment with New Zealand enterprise to take advantage of business opportunities in Asia. The APEC goal is for deeper and smoother economic integration as our businesses, cities and peoples become ever more closely connected.
This post was written by Stephen Jacobi, Executive Director of the NZ International Business Forum and an Alternate Member of the APEC Business Advisory Council (ABAC).
Welcome to the TPP negotiators.
New Zealand has been a key player in the Trans Pacific Partnership agreement. Given the potential benefits of TPP for New Zealand in terms of economic growth and job creation, it is good to see that negotiations are being held in Auckland between 3 to 12 December. As such, the representatives of some major New Zealand businesses and business organisations have written to Government endorsing its current approach to TPP negotiations. They note that there are complicated public policy issues involved in negotiating such an agreement, and that solutions need to be sought that are in New Zealand's overall interests. They also welcome the hard working negotiators.