In our latest Trade Working blog Stephen Jacobi and Stephanie Honey look at prospects for #WTO #MC13.
Remarks to Foreign Affairs, Defence and Trade Committee
NZ INTERNATIONAL BUSINESS FORUM
REMARKS TO THE FOREIGN AFFAIRS, DEFENCE AND TRADE COMMITTEE
INTERNATIONAL TREATY EXAMINATION OF THE NZ/UK FREE TRADE AGREEMENT
17 MARCH 2022
Madam Chair, Members of the Committee
Thank you for the opportunity to present the views of the NZ International Business Forum on the proposed ratification of the NZ/UK FTA.
NZIBF brings together a number of larger exporters and the peak business organisations to provide support and input into New Zealand’s trade negotiating efforts.
Before turning to the matter at hand, I would like to take a moment to express NZIBF’s support for the bipartisan Russia Sanctions legislation that was passed last week.
NZIBF members have watched with disbelief and sadness the violence perpetrated by Russia in Ukraine.
We believe this legislation is an appropriate response from New Zealand to the reprehensible invasion of a sovereign member state of the United Nations.
On the NZ/UK FTA, you have our written submission, which recommends you support the ratification of this latest free trade agreement.
This is a very good deal for New Zealand.
It delivers extremely advantageous market access to the UK market from day one for all items of export interest, supported by effective trade facilitation measures.
It puts in place a new and in some cases innovative set of rules for trade between the two countries.
It factors in the digital economy as well as elements like sustainability and inclusiveness, especially for Maori, women and small and medium size enterprises.
It positions the UK very well for future accession to the Comprehensive and Progressive Agreement on Trans Pacific Partnership (CPTPP), making the UK a valuable ally for New Zealand in global trade.
It is not an exaggeration to say that this is the most commercially meaningful FTA New Zealand has negotiated since our ground-breaking FTA with China.
And it is historic in that it recognises the UK’s departure from the European Union and restores the trading relationship to something more akin to what it was before 1972, albeit with some considerable modernisation.
Some will suggest that the 15 year time frame for the elimination of all tariffs on beef and lamb is a long time to wait.
They are correct but the FTA delivers through transitional quotas commercially meaningful market access for meat products in the interim.
In the case of dairy products, which is often the most sensitive item in any FTA, there is tariff elimination after 5 years.
Some may argue that the more innovative elements including economic co-operation for Māori, which are not subject to dispute settlement, are mere “clip ons” to the rest of the Agreement.
That is hardly the case – just like those famous “clip ons” to the Auckland Harbour Bridge,which have expanded the flow of traffic, so too will these provisions provide new opportunities for Māori business in the UK.
In fact, in the words of the Māori trade advisory body Te Taumata:
“This Agreement contains the broadest set of outcomes for Māori that New Zealand has negotiated in any FTA… (and) recognizes Māori trade and economic interests and priorities in the UK market.”
As in previous agreements, the right to uphold Te Tiriti o Waitangi has been upheld, in addition to the right to regulate in the national interest.
The implementation of the agreement will require very little adjustment in New Zealand.
Reducing the remaining NZ tariffs on goods of UK origin will increase the choices for NZ consumers of vehicles, cosmetics, gin and chocolate.
Extending to UK investors and services providers the same access and protections, enjoyed by our other FTA partners (albeit without investor-state dispute settlement) will benefit the economy.
Increasing the copyright term will align New Zealand to other international practice.
These are not large concessions to make when you consider the overriding benefits of this agreement.
There is however one thing this new agreement will not do.
While it will create new and useful options for exporters, it will not lessen the attractiveness of Asian and especially Chinese markets for New Zealand.
Some have argued that the benefits do not amount to an economic bonanza.
FTAs alone very rarely do, but as has been shown time and time again they do lead to new opportunities for trade and investment in both directions and this is something to be welcomed at this perilous time for the NZ and global economy.
Madam Chair, Members, our recommendation to you is that you support the ratification of the NZ/UK FTA and we are more than happy to answer any questions on our submission.
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