Trade update - October

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Trade update - October

30 Oct 2020 | BusinessNZ

Trade update - October

EU – NZ FTA

The previous EU Trade Commissioner Phil Hogan stated publicly that he was waiting to revise the EU market access offer to New Zealand until he knew who he would be dealing with at the New Zealand end after our General Election.  As we go to print we still do not know an answer to this question other than it will almost certainly be someone from the Labour Party.  Of course, Phil Hogan is no longer the EU Trade Commissioner.  His replacement is Vladis Dombrovski, a former Prime Minister of Latvia and former European Commission Executive Vice President.  Dombrovski is well regarded, from the centre-right, and a close confident of European Commission President Ursula von der Leyen.  Early engagement between New Zealand’s Trade Minister and Dombrovski will be important if we are to unblock this negotiation.

EU-UK FTA

Negotiators are at the start of week two of the second round of negotiations between New Zealand and the UK.  It is difficult to get a read out on progress but atmospherics are good.  A third round is expected to take place before Christmas.  This next round will be the first real test for the negotiation as the first market access offers are due to be exchanged.

There is some debate in New Zealand about whether a FTA with the UK can be completed without the completion of the NZ FTA with the EU and the UK’s own negotiations with the EU.  This is a complex question.  This is currently playing out over the treatment of the New Zealand quota arrangements with the EU – where the UK and EU have arbitrarily carved these up without the conclusion of negotiations with New Zealand.

Brexit

Uncertainty is rising over the future rules applying to the UK’s trade with the EU. There is the potential for the outcome to disrupt New Zealand exports to both the EU and UK – at least in the short term.  We recommend that exporters monitor this issue and visit the MFAT and NZTE websites for updates and latest advice.

RCEP

The Regional Comprehensive Economic Partnership will be signed in November – but India will not be joining the agreement.  For New Zealand India was going to be the big gain.  Nevertheless the agreement is positive in that it will liberalise some new trade between China, Korea and Japan.  Ministers and officials are hopeful that India will join in the future.

CPTPP

Senior officials from CPTPP members will meet in November.  No doubt they will be discussing the outcome of the 3 November US elections.  Should we be looking at a Biden Administration the chances of US membership increase. But what terms would the US set?  Could Biden get an agreement ratified?  And could a Labour Government in New Zealand agree to implement the currently suspended provisions from TPP?

No one is expecting any applications for CPTPP membership before or at this meeting.  Expansion seems to be a 2021 issue.

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