Let’s try that again: Happy new year!

In another year of disruption and loss there have been some surprising wins for trade.

The kindest thing that could be said about 2021 is that things didn’t quite work out as planned.  We did not defeat the pandemic and lives and livelihoods continued to be lost. While economic growth and trade flows showed an upswing during the year, the recovery is patchy with significant divergence between developed and developing economies.  We end the year with a high degree of uncertainty about the new variant and with supply chains continuing to feel the impact of high shipping costs and logistical challenges. 

APEC delivers …

One bright light this year has been APEC which New Zealand has chaired entirely virtually.  APEC has often been referred to, sometimes unflatteringly, as “A Perfect Excuse for a Conversation, but this year, when dialogue, co-operation and community were sorely needed, APEC came into its own.  Not only did the pandemic not disrupt continuing engagement between Ministers, business people and officials, but the outcomes from the APEC Leaders’ Statement were ones that could be warmly welcomed by business, both in terms of pandemic response and addressing the challenge of intensifying the economic recovery. 

The business input into APEC 21 was led by the APEC Business Advisory Council (ABAC). ABAC’s final report under the theme of “People, Place and Prosperity – Tāngata, Taiao me te Taurikura”, contained 43 specific recommendations and five annexes containing further detailed advocacy including in areas such as support for the WTO, climate leadership and Indigenous development.  Look inside the report for some strong recommendations on digital trade, an agenda which can only grow in the coming decade.

And the sun came out on trade too, occasionally

A number of trade policy developments served to warm the heart.  The Regional Comprehensive Economic Partnership (RCEP) concluded at the end of 2022 was ratified and will come into force on 1 January 2022.  After some anxious moments, an exciting Agreement in Principle on a future FTA was reached between the United Kingdom and New Zealand and we look forward to completion of this final agreement in early 2022.  No such breakthrough was achieved with the European Union: thanks to the French Presidential election, the negotiation will extend into another year with no certainty that the differences that exist between the parties over agricultural trade can be reconciled. 

Meanwhile the Comprehensive and Progressive Agreement on Trans Pacific Partnership (CPTPP) burst into life with accession applications under consideration from the UK, China and Chinese Taipei.   These negotiations will not be easy, but they show that some economies see in CPTPP an ambitious, high quality and comprehensive agreement that can assist their economic development.  It is to be regretted that the United States does not see itself as re-joining CPTPP any time soon.  The door remains open – for now – as it does for India to rejoin RCEP. 

 Options for exporters

New Zealand will derive only marginal immediate commercial benefits from RCEP and an expanded CPTPP because of the extensive network of FTAs we already have in the region.  The broader, strategic benefits are however significant and New Zealand exporters benefit when we have a wide range of market options to choose from.  That’s why this year we published a report on future FTA partners for New Zealand.    We know our negotiators have their hands full at present, but sometimes it can take a decade or more of work to build the conditions for future negotiations, which makes it all the more important to get started. 

Exporters also benefit when the rules of trade provide security and certainty for their businesses.

Exporters also benefit when the rules of trade provide security and certainty for their businesses. This year the ailing World Trade Organisation (WTO) got a shot in the arm from a new Director General, but Covid put paid to the 12th Ministerial Conference which had had to be postponed.  While making progress on the big picture at the WTO remains difficult, victory of sorts was snatched in a new agreement on services regulation and a new platform to help smaller businesses.  

Back here at Trade Works, we have worked to improve the functionality of our website and to make it easier to find and share the information we publish each week. In addition to ten blogs, we posted a large number of key documents to the ABAC pages as well as media releases, speeches and other items of trade news.  Our aim is to continue to help New Zealanders (and anyone interested) to make sense of trade.  In an environment like the one we are living in today, we cannot claim to be wise about the future – other than to say we expect disruption and uncertainty to be with us for some time yet.  And with that, we say – hopefully – happy new year!