Wellington, December 30, 2018
(Picture Supplied)
New Zealand exporters are among the first to benefit from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which took effect today, Sunday, December 30, 2018.
Trade and Export Growth Minister David Parker said that the CPTPP provides New Zealand with trade agreements for the first time with three significant economies: Japan, Canada and Mexico.
He issued the following Statement:
Reducing Tariffs
Tariffs in those countries will start to reduce from today. Mexico and Canada will cut tariffs again on January 1, 2019 giving a further boost to the competitiveness of New Zealand products in those markets.
When Viet Nam joins the Agreement on January 14, 2019, it will make an immediate double tariff cut to catch up. Japan’s second tariff cut will take place three months later on April 1, 2019.
$222 million in savings
The CPTPP has the potential to deliver an estimated $222 million of tariff savings to New Zealand exporters annually once it is fully in force, with almost half of that – or $105 million – now available in the first 12 months.
This will benefit New Zealand workers and businesses from Kaitaia to Bluff.
The Mexican Example
For example, one of the key exports from Northland is fisheries products. Currently our fish and fish products face tariffs of 20 per cent into Mexico for some lines, and tariffs of up to 10 per cent in Japan.
The CPTPP will see all tariffs eliminated on fisheries exports, with the majority of savings from today.
The Bay of Plenty, which accounts for 79% of New Zealand’s Kiwifruit production and is also our largest producer of avocados, stands to gain too with these tariffs disappearing immediately across the CPTPP region.
Our biggest wine region, Marlborough, will benefit as all tariffs on New Zealand wine will be eliminated into CPTPP markets over time, including immediate duty free access into Canada – our fourth largest wine export market.
The Seeds advantage
The Mid-Canterbury farmers supply 50% of the world’s radish seeds and a third of the world’s carrot seeds. They will also gain as tariffs on horticultural exports including seeds are eliminated within 15 years under CPTPP.
The Otago region produces almost half of all New Zealand’s summer fruits.
CPTPP will see total tariff elimination on summer fruits, including cherries, for which the tariffs into Japan will be eliminated within six years.
No tobacco challenges
We have also notified signatories that investor state dispute settlement (ISDS) claims challenging tobacco control measures cannot be made against New Zealand.
This is in keeping with the Government’s view on ISDS.
It is a further measure, alongside suspensions and side letters, to reduce the risk of successful ISDS cases being brought against New Zealand under CPTPP
Some Highlights
The CPTPP will take effect for New Zealand, Australia, Canada, Japan, Mexico and Singapore on December 30, 2018; and for Viet Nam on January 14, 2019.
It will enter into force for Brunei Darussalam, Chile, Malaysia and Peru 60 days after they complete their domestic procedures to ratify the Agreement.
More information on the CPTPP, including information for exporters and the outcomes for each market, is available at www.mfat.govt.nz/cptpp
