Following Brexit, the UK has now opted to pursue new trade alliances, with the Comprehensive and Progressive Agreement of Trans-Pacific Partnership (CPTPP) next on their agenda. The government, led by its Trade Minister, Liz Truss, has begun the process by formally making a request to officials from New Zealand and Japan. The UK will need to begin its approach with a written request to New Zealand that is the acting Depositary for the alliance.
As one of the world’s largest free-trade areas, inclusion in the CPTPP would grant the UK access to some of the fastest-growing markets. The CPTPP removes tariffs between 11 countries, namely New Zealand, Vietnam, Singapore, Peru, Mexico, Malaysia, Japan, Chile, Canada, Brunei, and Australia. These countries represent 13% of the world’s income and a population of about half a billion.
Minister of Trade, Damien O’Connor, has welcomed the move, stating that New Zealand has always supported the expansion of the CPTPP, especially amongst nations willing to meet the agreement’s high-quality standards. He reiterated the CPTPP objective of maintaining and growing open-rules based trade as being vital. He further stated that the CPTPP would be instrumental in driving post-Covid economic and trade recovery.
Other industry experts are however more cautionary. CEO of Beef + Lamb NZ, Sam McIvor, has warned that the UK should stop splitting tariff rate quotas on New Zealand meat that have compromised the country’s access to the EU markets. He stated that this move was leaving New Zealand worse off with the potential to reduce export revenue to New Zealand and affect rural farmers and their communities.
The New Zealand government has assured that they amid trade negotiations with both the UK and EU on this post-Brexit effect. It hopes to secure a better deal for exporters with more flexibility on quotas.
New Zealand meanwhile has also sought to further expand its trade partnerships by upgrading its FTA with China this past month. Damien O’Connor and his Chinese counterpart, Commerce Minister Wang Wentao, finalized the details of the Regional Comprehensive Economic Partnership (RCEP) that will see China enjoy much of the same investment review rules as members of the CPTPP.
The agreement will see both sides opening up their markets for increased trade, faster customs processing, and the introduction of new trade rules. It is also expected to have China open up more sectors of the economy to New Zealand including education, finance, trade in services, aviation, and transportation.