In a move that economists, planners and businesses see as strategic and futuristic, New Zealand and Taiwan entered a new era of bilateral relationship with the two countries signing an Economic Cooperation Agreement last fortnight.
Although Taiwan is not mentioned as the ‘Republic of China,’ the Agreement titled it ‘ANZTEC,’ a shortened version of ‘Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation.’
The New Zealand Government somewhat underplayed the event, with no Minister of the Crown or Member of Parliament present (Trade Minister Tim Groser was not even in the country) at the signing ceremony held at Victoria University in Wellington on July 10, 2013.
Quiet Ceremony
Wellington was clearly careful not to upset Mainland (People’s Republic of) China, which has become our second largest trading partner (after Australia) with two-way trade reaching $6.9 billion last year, up from $2.5 billion in 2008, the year in which the then Labour Government signed a Free Trade Agreement. Two-way trade between New Zealand and Mainland China is about $14.58 billion.
The deal with Taiwan was the first started and completed by the National Government. Parliament is yet to approve the deal, after which it would come into force in 2014.
Mr Groser later described Taiwan as ‘a major Asian economy,’ saying that the Agreement will enhance New Zealand’s growth prospects.
“It will immediately eliminate the tariffs for over 70% of current exports to Chinese Taipei, and will eventually allow 100% of New Zealand goods to enter Taiwan tariff-free,” he said.
Enhanced access
In addition to liberalising goods trade, ANZTEC provides for enhanced access for services exporters, investors and business travellers. It also provides for cooperation on trade, labour and environment issues, liberalises trade for 132 environmental goods, and improves connectedness of the two economies by encouraging better and more frequent air services.
A Taiwanese Foreign Ministry official quoted international media as saying that the pact, the first for Taiwan with a country with which it does not have full diplomatic relations, will be good for bilateral and regional trade.
“Taiwan’s industrial sectors and New Zealand’s agriculture stand to benefit the most. For Taipei, the Agreement would have far-reaching political significance. It may help Taiwan reach similar pacts with larger trading partners such as Singapore, with which negotiations are in progress,” the Wall Street Journal said.
“This is the first such agreement which incorporates a chapter on indigenous cooperation. It draws on the unique connections between Māori and the indigenous people of Chinese Taipei, and provides enhanced opportunities for cultural and economic cooperation,” the Taiwanese official said.
Extensive deal
The Agreement contains 25 chapters covering a wide range of topics, including Trade in Goods, Rules of Origin, Customs Procedures and Cooperation, Cross Border Trade in Services, Investment, Government Procurement, Dispute Settlement, Technical Barriers to Trade, Sanitary and Phytosanitary Measures, Electronic Commerce, Competition, Intellectual Property, Institutional Provisions, General Provisions (Preamble, Definitions, General Exceptions, and Transparency), Labour, Environment, Indigenous Issues, and Film and TV Co-production.
Growing partnership
Taiwan is New Zealand’s 12th largest trading partner, with bilateral trade placed at about $1.63 billion as at June 30, 2012. Separate feasibility studies done by both countries indicate that ANZTEC will expand market access for Taiwan and New Zealand’s market and improve consumer welfare.
According to Taiwan study, after the implementation period of 12 years, ANZTEC will result in the increase of Taiwan’s GDP by US$303 million, the total national output by about US$ 1.2 billion and add 6256 new jobs in Taiwan.
Exemplary Pact
Wellington based ExportNZ Executive Director Catherine Beard congratulated Mr Groser but acknowledged the previous Labour Government, which initiated the process, although the actual negotiations began only in May 2012.
“It is good to see that this high quality Economic Cooperation Agreement removes most tariffs after four years and is inclusive of goods and services, recognises cultural cooperation, environmental cooperation and includes creative industries as well. In addition to goods and services trade being facilitated, the agreement also allows New Zealand firms to compete in tenders for Taiwanese Government procurement for the first time,” she said.
BusinessNZ Chief Executive Phil O’Reilly said that the Agreement is an example of modern approach to trade.
“New Zealand and Taiwanese economies will benefit from having tariffs lifted. This will happen relatively quickly, with 98% being eliminated within the next four years, and full duty-free trade being achieved within 12 years,” he said.
The picture here shows Elliot Charng (left) representing the Taipei Economic and Cultural Office and Stephen Payton (right) Director, New Zealand Commerce and Industry Office in Taipei at the signing ceremony in Wellington on July 10, 2013
