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Posts Tagged ‘FTA’

Is NZ ready to take advantage of new FTAs?

Posted by Stuart Nash on June 26th, 2010

During urgency last week, parliament ratified, through amending legislation, two new FTAs: one with Malaysia and the other with Hong Kong (technically, the HK treaty is called a Closer Economic Partnership (CEP) agreement).

Labour supported the passage of both Bills.  After all, former Labour Trade Ministers Jim Sutton and Phil Goff did the ground work.  However, I have major concerns about the government’s (and Grosser’s) ability to put the framework in place that will allow NZ companies to take advantage of these agreements. 

In last year’s budget the govt cut $110m over 4 years from New Zealand Trade and Enterprise’s (NZTE) budget, thereby slashing the funding that Labour had directed towards developing NZ international markets.

Why is a government overseas development agency important?  I could write a book on this, however, in a nutshell, 97% of NZ companies are SMEs (they employ 19 staff or less).  This means the vast majority that may have export potential simply do not have the resources to: a) employ a full time International Marketing or Market Development Manager, b) set up an office in an off-shore market, or c) fund the level of due diligence necessary to justify capital expansion in order to become ‘export-ready’. 

Only 12% of our exports now go to Europe – and these two FTAs were ratified with countries that have completely different cultures, customs, languages, legal systems etc.  Exporting into Asia is a whole new ball game and success requires a significant level of competency that is in short supply in NZ.  The Fonterra’s and Fletcher’s will be able to take advantage of these FTAs as they do have the resources, knowledge and networks, but as we know, these firms are few and far between. 

This is where NZTE should come to the fore.  This government organisation should, in my view, be NZ’s international eyes and ears (and a lot more besides…).  About 6 months ago, I asked the retiring CEO of NZTE if his organisation was NZ’s international market development manager, and he replied “if only…”. 

How can NZ achieve an international vision when $110m has been cut to the budget of the country’s off-shore operators?  Quite simply, we can’t. 

I think we all agree (except the Greens..) that if NZ is to achieve a high level of sustainable economic growth, it has to be though a much greater level of international engagement (ie grow our export volumes, value and competencies).  Negotiating free trade agreements is an important step, however, helping NZ companies see the possibilities and reach their potential is vital if we are going to make it a reality.  National is failing on this one I am afraid.

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Filed under: trade
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Confucius is alive and well in New Zealand

Posted by Raymond Huo on November 13th, 2009

I had two reasons to be proud while attending the opening celebration of the Confucius Institute at the University of Auckland yesterday.

As an alumnus, I was proud of the achievements the university, my university, has reached over the years.

As a Labour MP, the first Labour MP of Chinese ethnicity, I’m proud of the active role the university is playing in forging and enhancing the already strong bond between New Zealand and China.

Politics maybe local but language, culture and friendship are all universal. And all of these things are strengthened by people to people contact.

More importantly, what the Confucius Institute has to offer will undoubtedly help prepare New Zealand to become a globalised nation.

In the modern world, no one can afford to be isolated. Any racially or culturally oriented hatred is a past tense. Anyone who tries to bring it back to the present tense is doomed to be short sighted and short lived.

New Zealand can’t afford to be isolated. I want our children to be able to speak not only one but three or four languages like our counterparts in European countries do.

Benefits are obvious both in a linguistic, cultural and economic sense. To a large extent it may determine their capability to survive and compete in the modern globalised arena.

Labour and Hon Phil Goff are well respected in the Asian communities.

Hon Phil Goff was the Trade Minister who signed the FTA with China.

China is now our third largest trading partner with the value of exports to China over the year ended June 2009 increasing by 62% per cent.

Building up our links with Asia and an increasingly globalised world will benefit New Zealand in the long term.

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Filed under: asian
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NZ-Malaysia FTA signed

Posted by Maryan Street on October 27th, 2009

Last night (Malaysian time), Hon Tim Groser, our Trade Minister, and his Malaysian counterpart, Y.B. Dato’ Mustapa Mohamed, signed the NZ-Malaysia Free Trade Agreement. PMs John Key and Y.A.B. Dato’ Sri Mohd Najib Tun Abdul Razak were in attendance.

This essentially is the culmination of bilateral talks which were kicked off by Helen Clark in 2005, which is why Labour developed, and the Nats are continuing, the bilateral approach to trade – they often take longer to nail down than one (or more) electoral cycle(s). As you can see by various news stories logged by the journos present, Fran O’Sullivan for the Herald, Colin Espiner for the Press and Ian Llewellyn for NZPA and from Radio NZ today, it is like the ASEAN Free Trade Agreement except better and faster.

95.1% of tariffs will be eliminated immediately the FTA comes into force in 2010, and then it moves quite rapidly, in trade terms, to 99.5% tariff elimination by 2016. That’s in 7 years, quite a lot faster than the 12 years it will take to get to the same point under the AANZFTA (ASEAN one). This is good news for our exporters, especially kiwifruit growers who will see a 15% tariff disappear immediately upon implementation. That’s a lot more profit to be kept in NZ. Good on them. It’s also a fillup to Fonterra which has invested megabucks in new plant in Malaysia recently.

In case you were wondering, the remaining .5% tariffs apply to things like wine and pork products which have their own religious and cultural barriers here. Fair enough.

The labour and environment side clauses are there too. It’s going to be important however to ensure that they are honoured at every point. Our CTU will watch with care to make sure that the clauses signed off by Kate Wilkinson a few weeks ago in NZ mean what they say. We were told yesterday by one of the presenters at a very good seminar organised by NZTE that Malaysian employment law tends to be “employee friendly”. That may be news to some of the unions here.

There was a formal dinner last night attended by both the PMs. I had the pleasure of sitting next to Dato’ Dr Michael Yeoh, CEO of the Asian Strategic Leadership Institute – and also a Commissioner on the Malaysian Human Rights Commission. Now THAT was an interesting conversation………for another blog.

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Filed under: international, trade
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