The Ross Report

The Ross Report
Friday, November 28, 2014

Trade opportunities

It has been an exciting few weeks for New Zealand on the international stage. Not only have we had international world leaders visiting our beautiful country, the Government has also been involved in three large international gatherings to discuss global trade - the Trans-Pacific Partnership Agreement negotiations, the Asia-Pacific Economic Cooperation Summit and the G20 Summit. These international events showcase our country as a player in the global marketplace with the ultimate aim of attracting more migrants, more diversity and enriching our country.

As a government, we are focussing on growing an even stronger economy. This is the best way to improve the lives of all New Zealanders. We plan to keep government spending under control with a relentless focus on returning to surplus and achieving our long term goal of reducing net Crown debt.

One of the ways to continue to make progress on strengthening New Zealand’s economy is to continue to improve trade. Improving trade means businesses can grow and more New Zealanders can gain jobs and higher incomes.

The TPPA aims to create a regional free trade agreement involving 12 Asia Pacific countries. The trade agreement, once complete, will help open up more markets for Kiwi exporters.

The Asia-Pacific region is a key driver of global economic growth. Roughly half of all international trade and more than 70 per cent of New Zealand’s trade and investment flow through the region.

Exports help to drive New Zealand economic growth which means more jobs for New Zealanders. The TPP countries account for 45 percent of New Zealand’s total trade so these negotiations towards an agreement are very exciting for New Zealand to be a part of.

The trade relationships between New Zealand and Asian countries is increasing with the conclusion of New Zealand and South Korea Free Trade Agreement. Prime Minister John Key announced the negotiations were completed recently. The FTA will put New Zealand exporters on a level playing field with competitors from Korea’s other FTA partners such as the United States and the European Union.

This is great news for New Zealand as South Korea is New Zealand's sixth largest export destination for goods and services and eight largest import source of goods and services, with a total two way trade of $4 billion in the year ending June 2014.

Showcasing New Zealand to International Visitors

New Zealand has also recently been host to some high profile world leaders: German Chancellor Angela Merkel, Canadian Prime Minister Stephen Harper and Chinese President Xi Jinping. Having such influential world leaders visit our country is an significant marketing opportunity for New Zealand, with some of the world’s biggest economies set to be watching.

Angela Merkel visited ahead of her attendance at the G20 summit in Brisbane. Germany ranks as New Zealand’s number one European Union trading partner and also provides the 6th highest number of tourists to New Zealand annually. Interestingly, Mrs Merkel is the only leader in the Western World with similar approval ratings to our Prime Minister John Key. After almost nine years as Chancellor she still consistently polls between 60 and 70 per cent. During her time in New Zealand, Chancellor Merkel announced a Memorandum of Understanding between Auckland University’s Bio-engineering Institute and Germany’s Fraunhofer. This Memorandum paves the way for a joint research programme on medical robotics.

Stephen Harper is the first Canadian Prime Minister to visit New Zealand in 19 years. He met with John Key for talks on the Canadian-New Zealand trade relationship. Discussions at these talks also included the Islamic State, Canada’s domestic security and the TPPA.

President Xi Jinping’s visit was also an important opportunity for New Zealand to extend its relationship with China during his three day visit. In bilateral talks that took place with our Prime Minister, the two leaders agreed to characterise the relationship between New Zealand and China as a Comprehensive Strategic Partnership in order to recognise the significance of the two nations’ relationship. Ten new agreements and arrangements between New Zealand and China have been signed, including an agreement to amend to the Free Trade Agreement and an agreement on the mutual recognition of academic qualifications in higher education.

Having such a great relationship with the world’s second-biggest economy is great news for New Zealand’s exporters and thus our country. The Free Trade Agreement has already proved very beneficial from an economic perspective since its signing. Any amendments that improve the Agreement will be welcome.