Venu Menon
Wellington, May 9,2024
A Free Trade Agreement between New Zealand and the United Arab Emirates (UAE) is in the offing.
New Zealand’s Minister for Trade Todd McClay and UAE Trade Minister Thani bin Ahmed Al Zeyoudi met in Dubai recently and announced that talks would start on a Comprehensive Economic Partnership Agreement (CEPA), official parlance for a free trade agreement.
“The UAE is a key export destination and hub in the Gulf region, and there are significant opportunities to enhance cooperation across a range of areas, including agriculture and sustainable energy,” as per a statement released by Trade Minister McClay’s office on May 7.
With exports at $1.04 billion in 2023, up 8% from the preceding year, the UAE is one of New Zealand’s largest trade partners in the Middle East, according to data from New Zealand’s Ministry of Foreign Affairs and Trade (MFAT). Two-way trade stood at $1.18 billion.
On a per-capita basis, the UAE is among the wealthiest countries in the world. Its diversified economy hinges on financial services, logistics, transport and petroleum.
The UAE began its push towards signing bilateral CEPAs in 2021, tallying up more than a dozen such agreements as of May 2024.
Gateway to Gulf markets
For New Zealand, the UAE is a window to the region, particularly in the aviation and maritime sectors. Its largest city, Dubai, hosts a sizeable New Zealand community.
The trade talks with the UAE will run alongside ongoing negotiations for a free trade agreement with the Gulf Cooperation Council (GCC), a six-member regional grouping comprising the UAE, Kuwait, Saudi Arabia, Qatar, Oman and Bahrain.
The FTA with the GCC came up for discussion during Trade Minister McClay’s visit to Saudi Arabia last week.
The GCC economies are New Zealand’s eighth largest trading partner (with the UAE and Saudi Arabia being the key markets) and seventh largest export destination, according to MFAT data.
New Zealand exports to the GCC economies in 2023 totalled $2.47 billion, comprising $2.35 billion in goods and $119.1 million in services.
New Zealand imports from GCC economies totalled $453 million in 2023, comprising $435.6 million in goods and $17.7 million in services.
Negotiations for an FTA between New Zealand and the GCC started back in 2007 and concluded in 2009, but were not finalised or signed owing to constraints on the side of the GCC. But negotiations reopened since and are currently under way.
GCC countries are rich in oil and gas, but lag behind in agricultural production due to a paucity of arable land. As a result, food imports to the region are high, with New Zealand’s meat and dairy exports meeting some of that demand.
The GCC economies are looking to move away from a dependence on oil and diversifying into high-tech and service sectors, which presents an opportunity for New Zealand’s government as well as service sector businesses and education providers.
Key commitments
As per the text of the 2009 FTA draft, which serves as the base document in current negotiations with the GCC, New Zealand seeks market access for its goods and the “comprehensive elimination of tariffs on all goods within commercially meaningful timeframes.”
Protection of the natural environment as well as labour rights are key commitments for New Zealand while negotiating the FTA with the GCC countries.
Venu Menon is an Indian Newslink reporter based in Wellington
