New Zealand, a small island nation in the southern Pacific, is known for its stunning landscapes, friendly people, and thriving economy. One of the key drivers of its economic success is its free trade agreements (FTAs) with other countries. FTAs are agreements between two or more countries to eliminate or reduce barriers to trade, such as tariffs or quotas, and to increase the flow of goods and services between them.
New Zealand has long been a champion of free trade, and has signed FTAs with a number of countries around the world. These agreements have helped to boost the country`s exports, create jobs, and attract foreign investment. In this article, we will take a closer look at some of the main FTAs that New Zealand has signed, and what they mean for the country`s economy.
China-New Zealand FTA
The China-New Zealand FTA was signed in 2008, and was the first FTA that China had signed with a developed country. Since then, the agreement has helped to cement the trade relationship between the two countries, with China now New Zealand`s largest trading partner. Under the FTA, tariffs on 96% of New Zealand`s exports to China have been eliminated, making it easier and more cost-effective for New Zealand businesses to export their goods to this massive market.
Trans-Pacific Partnership (TPP)
The TPP was a comprehensive FTA that was negotiated between 12 countries around the Pacific Rim, including New Zealand, the United States, Japan, and Australia. The aim of the agreement was to open up trade and investment between the participating countries and boost economic growth. However, in 2017, the United States withdrew from the agreement, leaving the remaining 11 countries to renegotiate their terms. The result was the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into force in 2018. Under the CPTPP, tariffs on 99% of New Zealand`s exports to the participating countries have been eliminated.
Australia-New Zealand Closer Economic Relations (CER) Agreement
The CER agreement was signed in 1983, and is one of the most enduring FTAs in the world. It is a comprehensive agreement that covers trade in goods and services, and also includes provisions for investment, intellectual property, and government procurement. Under the agreement, tariffs on most goods traded between Australia and New Zealand have been eliminated, and there is free movement of people and capital between the two countries.
Comprehensive Economic Partnership Agreement (CEPA)
The CEPA is an FTA between New Zealand and Hong Kong, which came into force in 2011. It is a comprehensive agreement that covers trade in goods and services, investment, and other areas such as intellectual property and e-commerce. Under the CEPA, tariffs on most goods traded between the two countries have been eliminated, and there are provisions to protect intellectual property rights and to facilitate cross-border trade in services.
Conclusion
New Zealand`s free trade agreements have been instrumental in driving the country`s economic success. By eliminating barriers to trade and increasing the flow of goods and services between countries, these agreements have helped to boost exports, create jobs, and attract foreign investment. The agreements with China, Australia, and the Pacific Rim countries are particularly important, given the size and growth potential of these markets. As New Zealand continues to pursue a free trade agenda, it is likely that we will see even more FTAs signed in the years to come.