Submission to the Foreign Affairs, Defence and Trade Committee of the New Zealand Parliament

1.  This submission is made on behalf of the NZ International Business Forum (NZIBF) whose members are listed at Annex A1. NZIBF is a forum of senior business leaders working together to promote New Zealand’s engagement in the global economy. NZIBF earlier submitted to the Foreign Affairs, Defence and Trade Committee commending the conclusion of the Comprehensive and Progressive Agreement on Trans Pacific Partnership (CPTPP) as part of the International Treaty Examination of the agreement in April of this year.

2.  As we stated in our earlier submission, NZIBF warmly welcomes and supports the CPTPP. The CPTPP offers consistent, certain and more advantageous access to four new markets with which New Zealand has not to date been able to negotiate bilateral FTAs: this includes Japan, one of our key trading partners and the one in Asia apart from North Korea where we do not have existing FTA arrangements, as well as Canada, Mexico and Peru. In addition, CPTPP will enhance our trade and investment relationship with six existing FTA partners. While CPTPP, like the earlier TPP, is imperfect in the scope of liberalisation achieved in some areas, including for the dairy sector and for a very small number of other products and some services sectors, the agreement is an improvement over the status quo. Despite the unfortunate withdrawal of the United States, CPTPP provides a new framework for trade in goods and services and investment flows in the powerhouse Asia-Pacific region, and positions New Zealand well to participate effectively in global value chains. The new framework embraces groundbreaking “next generation” business issues such as the digital economy along with protection of the environment and labour standards. Overall, while the exact magnitude of gains is difficult to calculate, without question the CPTPP will contribute to enhancing New Zealand’s economic growth, job creation and living standards. CPTPP sends a powerful signal about the importance of continuing trade liberalisation at a time of stress for the international trading system. The counterfactual scenario, of standing aside from CPTPP, risks significant adverse consequences for New Zealand in the region.

3.  NZIBF commends the present enabling legislation, which is required to amend the earlier legislation in respect of TPP and implement New Zealand’s participation in CPTPP. NZIBF notes that the legislation in respect of CPTPP differs from the earlier legislation in that a number of items have been suspended from the agreement including in relation to copyright term extension and pharmaceutical products. Adjustment is required in some specific areas to implement CPTPP commitments, primarily in relation to tariff adjustments, use of the term “ice wine”, raising the investment threshold under the Overseas Investment Act for CPTPP members and others in terms of New Zealand’s most favoured nation (MFN) obligations, technical areas of copyright and patent legislation, transparency obligations. NZIBF supports these amendments. Beyond this very little change is otherwise required in relation to current practices in New Zealand. NZIBF believes that the adjustment arising from implementation of this legislation in New Zealand will be minimal.

4.  NZIBF hopes therefore that all political parties in the New Zealand Parliament will be able to support this implementing legislation given the significant benefits it will provide to New Zealand business, to consumers and to the economy overall. NZIBF urges the early passage of this legislation so that New Zealand may be amongst the six parties required for CPTPP to enter into force.

5.  While this submission is made on behalf of the NZIBF membership, a number of NZIBF members made their own submissions on the International Treaty Examination of CPTPP in April 2018, containing more detailed comments on specific issues relevant to their individual business interests.