10 ways that New Zealand’s trade policy offers a brighter future for all of us

by | Aug 10, 2017 | Trade Working Blog


We love trade, so we’re pleased that, in view of the upcoming NZ election, the folks at It’s our future have initiated a campaign highlighting their wish list for trade agreements in the future.  We welcome this debate.  Trade is important and needs to be talked about.  In the spirit of engagement, we have come up with our own list.  (It might be described as “relentlessly positive”….)

Our interest is in seeing trade and investment deliver value for New Zealand and for Kiwis.  We welcome feedback.  Let’s make trade great again!

  1. Greater transparency in negotiations

Trade negotiations offer important new opportunities for New Zealand exporters and the households and communities they support. But New Zealand negotiators have acknowledged that negotiations must be conducted more transparently than in the past, including by keeping the public better informed and consulting more effectively with stakeholders. We agree. The public, business and other stakeholders, should hold them to that. If consultation is done well, there should be no need to share negotiating texts. This helps the parties to find balance and mutually-acceptable compromises by preserving the confidentiality of the parties, as in any negotiation. It also helps to strengthen the hand of New Zealand negotiators.

  1. Democratic oversight

All multilateral treaties and major bilateral treaties must be presented to Parliament for examination, and are subject to a National Interest Analysis and a Select Committee process taking account of public submissions. Only Parliament can change New Zealand law, if a new treaty requires it.[1]

  1. Preserve the Government’s right to protect the public interest and the environment

The New Zealand Government remains free to protect and promote the health and wellbeing of its people and the natural environment, thanks to strong and enforceable carve-outs that New Zealand negotiators have insisted on including in all of our trade agreements. These carve-outs preserve the Government’s right to regulate on matters of legitimate public policy.

  1. An overseas investment regime with high integrity

The New Zealand Government sets its own rules on international investment. At the same time, successive New Zealand Governments have welcomed foreign investment because it provides much-needed capital to strengthen and develop our own businesses, infrastructure and productive capacity. New Zealand’s existing trade agreements contain safeguards to protect the Government from frivolous or unsubstantiated claims under Investor-State Dispute Settlement (ISDS). New Zealand negotiators also pursue ISDS rules that help to reassure New Zealanders investing overseas that their investments will be protected from unwarranted actions by other governments.

  1. Protection of international law

New Zealand trade negotiators have broken new ground by including legally-binding provisions to safeguard labour standards and the protection of the environment in trade agreements. An international rules-based system – for trade as well as other important policy matters – is critical for a small country like New Zealand.

  1. Honour the Treaty of Waitangi

All New Zealand trade and investment agreements contain a strong and comprehensive carve-out to protect the rights of Māori and enable the Crown to fulfil its Treaty obligations, consistent with Te Tiriti o Waitangi. The Waitangi Tribunal found that the approach used in these trade agreements provides a reasonable degree of protection to Māori interests.[2]

  1. Raise living standards in New Zealand

Trade agreements enable New Zealand farmers, manufacturers, workers, service providers and firms to benefit from new export opportunities, lower trade costs and more favourable trade rules. That helps to raise incomes for the families and communities that exports support, and allows more and better jobs to be created. The tradable sector accounts for over 40 percent of New Zealand’s real GDP and almost three-quarters of a million jobs.[3] Trade also gives New Zealanders access to a wider and better-value range of products and services than we would otherwise have.

  1. Promote global economic development

Trade has helped to lift over a billion people out of extreme poverty over the last thirty years. Trade not only enables people to earn export income for what they can produce best, but also to buy goods and services more cheaply. This is most powerfully felt by the poor and vulnerable, who spend a higher proportion of their incomes on basic goods and services, which are relatively more traded. One study of 40 countries found that open trade boosted the purchasing power of low-income households by nearly two-thirds.[4]

  1. Promote the free flow of knowledge and information

New Zealand trade policy should embrace free flows of data and information while also seeking appropriate protections for privacy and security. Trade and investment flows enhance the sharing not only of knowledge, but also technology and innovation. Greater connectedness and openness over the last fifty years –through flows of information, goods, services, people and capital – has enabled unparalleled global economic development.

  1. But global trade can work better

The global trading system, and efforts to liberalise trade, make a hugely important contribution to individual livelihoods and global prosperity. But the system is far from perfect.   Business models have changed, and the rules need to be updated for today’s realities. Equally, in order to ensure that trade contributes meaningfully to inclusive growth, governments need to put in place policies at home ensure that the benefits of trade can be more widely shared. Those who lose jobs – as a result of technology change or domestic economic churn, for example – must not be left behind. Solutions will need to be found in education, retraining, social safety nets, policies that support worker mobility and other areas. What is needed is creative and targeted policies that enable openness while managing any challenges. But this broader obligation must not be an excuse to walk away from trade. That will leave all of us the poorer.

This post has been prepared by the team at Tradeworks.

[1] New Zealand Parliament, ‘The Treaty-making process in New Zealand’, https://www.parliament.nz/resource/0000177495

[2] Waitangi Tribunal ‘Report on the Trans-Pacific Partnership Agreement, WAI2522. The Tribunal also found that there should be further dialogue between the Crown and Māori on an appropriate Treaty clause for future trade agreements and on ISDS. https://forms.justice.govt.nz/search/WT/reports/reportSummary.html?reportId=wt_DOC_104833137

[3] NZIER (2017), ‘The Benefits of Trade’, report for Export New Zealand, page 1; see fully report at http://www.exportnz.org.nz/__data/assets/pdf_file/0018/128025/Benefits-of-Trade.pdf

[4] OECD (2017), ‘Making Trade Work for All’, Trade and Agriculture Directorate, May 2017, page 7 footnote 9, and page 29, https://www.oecd.org/trade/making-trade-work-for-all.pdf


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