The AANZFTA and New Zealand
1. CONTENTS 1. 3. 4. 5. 1. 2. 6. 1. 2. 7. 8. 9. 10. Table of contents Introduction The AANZFTA AANZFTA & New Zealand Advantages to New Zealand Disadvantages to New Zealand AANZFTA & ASEAN countries Advantages Disadvantages AANZFTA, WTO and Doha round Conclusion References Appendix Error! Bookmark not defined. 3 3 4 4 6 7 7 7 7 8 9 10
2. INTRODUCTION Free trade agreements (FTA) help exporters and investors by liberalising and facilitating the export of goods, services and investments in between the countries who have signed the agreement. They do so by removing tariffs reducing the transaction costs and import quotas as well as putting in place structure to help exporters and promotion cooperation. They work again protectionism. New Zealand has a long history of FTAs. One of the latest one put in place is the AANZFTA. In this report we will look at the key element this FTA supports. We will then look at the advantages and disadvantages it brings to New Zealand and to what measure it can help the value of NZ’s export and overseas earnings. We will finish by looking at the place of FTAs such as the AANZFTA among the WTO and the Doha round. 3. THE AANZFTA Due to its small size, New Zealand has some real advantages in negotiating free trade agreements with countries it exports to and import from. New Zealand has a long history of free trade agreements with the first one ever signed with Australia in 1983. The region of South East Asia is the closest to New Zealand after the region of the Pacific and it made sense for New Zealand and Australia to develop their partnership with the ASEAN countries. The AANZFTA agreement includes New Zealand, Australia as well as the ASEAN countries listed below. ASEAN: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, The Philippines, Singapore, Thailand, Vietnam. “The overriding objective of the FTA is to open up economic opportunities for New Zealand business in the ASEAN region and to strengthen commercial ties with its third largest combined export market” (“FAQ”, n.d.). New Zealand has been an ASEAN dialogue partner with positive engagement since 1975 (“Milestones”, n.d.). The negotiations started in 2005 and the agreement was signed in 2009 ("Agreement establishing the ASEAN", n.d.). The Agreement entered into force on January 1 2010 (“Milestones”,n.d.). NEW ZEALAND exports (table 1) to the region for June 2010 to June 2011 were NZ$4383.12 million. That’s 9.51% of New Zealand’s worldwide exports. New Zealand imports (table 2) from the region for June 2010 to June 2011 were NZ$6335.05 million. That’s 14.84% of New Zealand’s worldwide imports. st
ASEAN is New Zealand’s third export market for goods and is the third largest trading partner ("Agreement establishing the ASEAN", n.d.).
ASEAN has a fast growing population of over 600 million people. ASEAN has an estimated GDP exceeding US$700 billion.
The main aspects covered by the AANZFTA are to liberalise trade in goods and services, to have rules to govern trade, to allow movement of people, to enhance protection for investment, to put some measures in place to improve business flows and dispute settlement, to improve environment and labor and to improve temporary Employment Entry / Working Holiday Schemes (“What is the ASEAN FTA”, n.d.). 4. AANZFTA & NEW ZEALAND The FTA is a key element in the relationship between New Zealand and South-East Asia countries in order to “underscore a broader strategic commitment to greater national integration” ("Agreement establishing the ASEAN", n.d.). 1. ADVANTAGES TO NEW ZEALAND The reasons for New Zealand in signing the agreement are numerous but the main one is to increase the export/import of goods and services between New Zealand and the ASEAN countries. Other advantages are listed below: By 2020 99% of the tariffs will be eliminated for import and exports ("Agreement establishing the ASEAN", n.d.). The main industries...
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