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Some thoughts from a NZ food producer & Ag Trade Envoy perspective on the signing of the Regional Comprehensive Economic Partnership Free Trade Agreement (RCEP FTA) with 15 member economies - follow the thread below:
We're all in a global operating context where the world is facing a number of significant challenges.
Trade is an important part of the solution to these global challenges.
FTA's that liberalise trade, increase trade facilitation & market access, reduce barriers, set agreed rules & processes, include dispute resolution mechanisms, and generate value back to NZ, NZ'ers and our food & fibres sector, are welcomed by our farmers.
Costs to produce food are on an upward trajectory, and farmers are increasing investment to balance food production with environmental needs & mitigating GHG emissions. NZ's exporters therefore have to capture economic value from FTA's to for farmers.
A FTA is first and foremost the Government to Government (G2G) negotiated and agreed framework that provides rules, conditions, processes, stability, predictability & confidence for business to business (B2B) commercial relationships/deals/contracts/transactions to take place.
For the true benefits of an FTA to be optimized and realized in today's context, it requires cross-border B2B negotiations and goods/services exchange for commercial value.
There are many complex facets of international trade that exporting businesses have to work through, assess or prepare for: standards, processes, certification, timing for customs clearance and many other factors - the RCEP FTA streamlines these factors across the 15 economies.
So although the RCEP FTA has been agreed and signed at a Government level, it still needs ratification and exporting businesses to do what they do best to capture the benefits.
But for the benefits of the RCEP FTA to be realized by our food producers and all NZ'ers, a lot of work still has to be done, before the agreement can come into force. We won't see the benefits overnight!
Some facts:
The 15 RCEP countries: represent 30% of the world's population (2.3billion people); and 30% of world GDP ($38,813 billion).
The 15 RCEP countries: represent 30% of the world's population (2.3billion people); and 30% of world GDP ($38,813 billion).
Recieve 56% of NZ's total exports, representing 61% of NZ's goods exports and 45% of NZs services exports (2019 data).
7 of NZ's top 10 trading partners based on 2 way trade are in RCEP - China, Australia, Japan, Singapore, South Korea, Thailand and Malaysia.
An important advance to NZ from RCEP is the reduction of tariff barriers particularly with Indonesia which benefit NZ produced meat, table salt, fish, liquid milk, powdered cheese, honey, avocados, tomatoes, & persimmons.
The NZ food and fibres sector is disappointed India could not agree on all the terms of the RCEP FTA but are glad the economies involved have kept the door open to India to join, and we look forward to when they do.
