Frequently Asked Questions for ANZCBC on the AANZFTA

1) What has been the Council's involvement in the AANZFTA negotiations? Will your role change now that the FTA has been signed?

Throughout the process we were consulted by the NZ Government and through our members provided feedback on issues they thought required to be addressed within the negotiations.

Now the agreement has been signed, we see ourselves as a delivery agent of advice, information and events to familiarise members with its benefits, timelines and terms and conditions.

2) How important is the ASEAN region to NZ in terms of trade?

New Zealand's relations with the countries of South and Southeast Asia are of growing importance to us. The region is our closest outside the South Pacific and our links with it go back many years. New Zealand is accredited to almost all countries in the region and we have embassies or high commissions in eight of these. New Zealand's total exports to Southeast Asia for the year ended 30 June 2008 were NZ$4,589 billion, which represents 11.5% of total exports and total trade $11,625 billion, 13.75% of NZ’s total trade.

The growth potential is, in addition, seen as outstanding in terms of NZ’s overall world trade.

3) With which ASEAN nations does NZ have the greatest volume of trade, and why?

Singapore with 27% of NZ’s ASEAN trade, Malaysia 23% and Thailand 18% have the greatest volume of trade, because, in the case of Singapore and Malaysia there have been traditional British Commonwealth and educational ties with extensive English spoken and with all three existing trade agreements in force.

4) Does the FTA represent a significant step forward in terms of NZ's trading relationship with any of the ASEAN nations in particular, with whom trade may have been restricted in the past?

While New Zealand has pre-existing FTAs in the region, the AANZFTA agreement opens up new opportunities in key export markets where it has no previous agreements. For instance, there were no pre-existing FTAs with Indonesia, the Philippines and Vietnam. Respectively these three countries are New Zealand’s 7th, 13th and 24th most important bilateral trading partners, collectively representing $3.23billion worth of trade.

As well as opening new opportunities in ASEAN countries where New Zealand has no existing FTAs, the AANZFTA agreement builds on the outcomes of pre-existing FTAs particularly in the area of services and investment. Similarly, in investment, the AANZFTA agreement provides additional protections for New Zealand investors and investments into the region that build on existing FTA outcomes with Thailand and Singapore.

The plurilateral nature of the Agreement also presents exporters and manufacturers with opportunities that go beyond those available in New Zealand’s bilateral FTAs. For instance, the AANZFTA agreement’s rules of origin (ROO) provide a mechanism through which originating goods can be cumulated across the AANZFTA agreement Parties.

Beyond the commercial reasons, there are significant strategic benefits as a consequence of concluding the AANZFTA agreement in addition to New Zealand’s bilateral FTAs.

5) In which areas do you believe the FTA will have the greatest impact for NZ?

The overriding objective of the FTA is to open up economic opportunities for New Zealand business in ASEAN and to strengthen commercial ties with our third largest combined export market. The AANZFTA agreement will:

Eliminate tariffs on 99 percent of New Zealand’s current trade with Indonesia, Malaysia, the Philippines and Viet Nam by 2020 i.e. within twelve years of entry-into-force at most;
Secure new commitments in New Zealand’s priority services sectors, from ASEAN country partners;
Benefit New Zealand investors and their investments with new and additional protection for their investments into the region including through the potential for recourse to binding investor-state arbitration procedures;
Strengthening the relationship between the Parties and establish a framework for cooperation. It will be of assistance to member countries in working together within the WTO;
Support New Zealand's objective of broadening and deepening relations in Asia and its wider trade policy interests in strengthening economic integration in the Asia-Pacific;
Assist in raising the commercial profile for New Zealand companies in the region; and,
Keep New Zealand competitive in the ASEAN market, including through mechanisms which provide for further development of the agreement over time. This should help keep New Zealand at the forefront of trade and investment relationships with ASEAN as the region evolves.