Changing Nature of New Zealand International Trade Agreements Report

This report examines the evolving landscape of New Zealand's international trade agreements, from the pre-WTO era to the present day. It delves into the influence of Britain, the rise of Asian and Commonwealth trade partners, and the impact of the Treaty of Waitangi. The report analyzes various trade agreements, including preferential and bilateral agreements, RCEP, CPTPP, and the role of common customs. It also addresses the impact of global events like the US-China trade war and Brexit on New Zealand's trade. Furthermore, the report investigates New Zealand's trade policy initiative, 'Trade for All,' and its implications. The conclusion emphasizes a shift towards intra-state policy, restructuring FTA rules, and improving investor-trade dispute settlements to enhance New Zealand's overseas trade relations.

Topic
Changing nature of New Zealand
international trade agreements: What is
NZ’s trade policy initiative of “Trade for
All”?

Contents covered under this topic
 Introduction
 Pre WTO-GATT-till 1995
 Treaty of Waitangi
 Trade agreements (Preferential and Bilateral)
 RCEP, CPTPP, Common Customs
 De-escalating US-China trade war
 Brexit
 Conclusion

Pre WTO-GATT-till 1995
• Both the import and export sector of New Zealand have been motivated
by Britain as compared to other Commonwealth nations.
• During the persisting depression (1870- 1920), Britain’s importance
started declining on the country’s trade system (Egerton, 2018).
• Since 1950, the country’s trade dependency began to get improved on
other Asian and Commonwealth countries.
• New Zealand used to import processed and manufactured products
with its trade partners.
• Export items had been changed from extractive industrial products from
the grassland farming.

Introduction
• Trade system of New Zealand is deeply influenced by the
overseas traders.
• Since the first occurrence of the European settlers to the
current presence of WTO and GATT agreement.
• The country’s external trade has been flourishing with the
establishment of the British Colonialism since the 1880s
(Pool, 2015).
• The liberation pattern in the trade system has been
acknowledged following the participation in the
international trade agreement (Ward, 2015).

Introduction to WTO
• New Zealand entered into the agreement of the World Trade
Organization (WTO) in January 1, 1995.
• The international organization is aimed at resolving the trade
disputes among the member nations (Bodwitch, 2017).
• The country became the member of WTO after replacing the
General Agreement on Tariffs and Trade Organization.
• The Ministry of Foreign affairs and Trade (MAFTA) worked
together with Permanent Mission in Geneva to formulate
trade negotiation laws for the overseas countries.

Treaty of Waitangi
• Treaty of Waitangi was initially signed between the Maori
chiefs and the British Crown in 1840.
• Waitangi is a located at the North Island of New Zealand.
The treaty protects the interests of Maori.
• Partnership, protection and participation are the three
fundamental features of this treaty.
• The aim of the treaty was to provide the property rights to
the Maori land owners.

Trade agreements (Preferential and Bilateral)
• Preferential trade agreement allows the New Zealand government
to design specific tariff system for the certain group of countries.
• Tariff and import duty act as the key trade tool under the
preferential trade agreement.
• Trade agreement with the ASEAN countries is considered as a part
of the preferential trade policy.
• Improvement of the trade condition between two economies is
the main objective of the Bilateral Trade Agreement (Li, Wang &
Whalley, 2017).
• For example, the Free Trade Agreement (FTA) between Australia
and New Zealand reflects the motive of the Bilateral trade policy.

RCEP and CPTPP
• The Regional Comprehensive Economic Partnership (RCEP) is formed
as to enhance the country’s trade relationship with the Asian countries.
• It is a comprehensive trade agreement which covers the different
dimensions including the finance, technique and economic aspects of
the trade agreement.
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership
(CPTPP) refers to the free trade agreement of New Zealand economy
with the Asia Pacific region (Lee-Makiyama, 2015).
• CPTPP came into effect in 2018 initially with six countries, such as,
Canada, Japan, New Zealand, Australia and Singapore.

Unilateral agreement and Common Customs
• Unilateral trade agreement never does not consider the trade
restrictions, like, tariff and import duty.
• Free trade Agreement (FTA) is the implication of the Unilateral trade
agreement.
• The common Customs Tariff is applicable for the import goods and
services for the member countries of the European Union (Kelsey,
2015).
• The Combined nomenclature was developed as to formulate the
trade policy for the Common customs Tariff including the external EU
countries.
• Common Custom results in the harmonization of the tariff duty for
New Zealand which is not even part of the EU (Vitalis, 2015).

De-escalating US-China trade war
• The evolving trade dispute between the USA and China triggers a
great challenge to the international trade.
• On the account of unfair trade practice, the USA government has
imposed tariff of $350 billion on the imported goods of China till
now.
• As a part of the retaliation effect, $110 billion of tariff amount has
been imposed on the American products by the Chinese
government.
• Considering the negative impacts, the International Summit in
Beijing has initiated to reduce the trade escalations between the
countries since 2018.
• More than 1200 representatives belong to thirty nations including
New Zealand have participated in this summit.

Brexit
• Brexit refers to the withdrawal of the UK from the EU. The UK has
initiated the withdrawal process since 2016.
• However, the finalization of the agreement has not been completed
even after the five years.
• The uncertainty related to Brexit policy is expected to aggravate the
trade relation between the EU countries and the UK.
• However, MAFTA expects that this uncertainty in the trade policy will
not affect the trade volume of New Zealand.

Conclusion
• MFTA is proposed to shift its focus from the inter-state policy to intra-state
policy.
• The rules and regulations under FTA should be restructured in the favor of
the domestic traders.
• Investor-trade dispute settlement is expected to be done even if does not
match with the WTO policies.
• De-escalating trade deficit condition is expected to improve the overseas
trade relation with New Zealand.

Reference list
Egerton, H. E. (2018). A short history of British colonial policy. Routledge.
Ward, A. (2015). An unsettled history: Treaty claims in New Zealand today. Bridget
Williams Books.
Pool, I. (2015). Colonization and development in new zealand between 1769 and
1900. The Seeds of Rangiatea, 3.
Bodwitch, H. (2017). Challenges for New Zealand's individual transferable quota
system: Processor consolidation, fisher exclusion, & Māori quota rights. Marine
Policy, 80, 88-95.
Kelsey, J. (2015). Reclaiming the future: New Zealand and the global economy. Bridget
Williams Books.
Li, C., Wang, J., & Whalley, J. (2017). China’s regional and bilateral trade agreements.
In THE ECONOMIES OF CHINA AND INDIA Cooperation and Conflict: Volume 1: China
and India—The International Context and Economic Growth, Manufacturing
Performance and Rural Development (pp. 175-194).
Lee-Makiyama, H. (2015). New Zealand: The EU's Asia-Pacific partnership and the case
for a next generation FTA (No. 7/2015). ECIPE Policy Brief.
Vitalis, V. (2015). Regional economic integration and multilateralism: The case of the
ASEAN-Australia-New Zealand FTA and the Malaysia-New Zealand FTA.