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Two-way trade with CPTPP countries nears $50 billion

New Zealand’s two-way trade with the combined Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) countries was $49.6 billion in the December 2018 year, Stats NZ said today.

The CPTPP is a free trade agreement between New Zealand and 10 other countries in the Pacific region. Canada, Australia, Mexico, Japan, Singapore, Viet Nam, and New Zealand have ratified the trade agreement, with four countries (Brunei Darussalam, Chile, Malaysia, and Peru) yet to do so.

“CPTPP countries account for almost one-third of our total two-way trade,” international statistics senior manager Peter Dolan said. “By comparison, China, our largest single trading partner, accounts for almost one-fifth of our total two-way trade.”

Goods and services exported to CPTPP countries totalled $24.4 billion, and imports totalled $25.2 billion. New Zealand is close to a trade balance with the CPTPP countries as a group.

The CPTPP came into force on 30 December 2018. Tariffs will be eliminated on most goods exports to CPTPP economies. Where there are tariff exceptions, access will be improved through partial tariff reductions and duty-free quotas (see Comprehensive and Progressive Agreement for Trans-Pacific Partnership for more information).

New Zealand has existing trade agreements with several countries, including some CPTPP countries. For example, New Zealand has had a trade deal with Australia for over 50 years – the 1965 New Zealand Australia Free Trade Agreement was replaced in 1983 by the New Zealand Australia Closer Economic Relations agreement. Australia accounts for over 50 percent of New Zealand’s two-way trade with CPTPP countries.

Beef, dairy, wine, and horticulture – exports that had previous tariff restrictions – are among the New Zealand sectors likely to benefit from reduced or removal of restrictions between CPTPP countries.

Spotlight on exports to our new free trade partners

New Zealand currently exports $6.1 billion of goods and services (7.5 percent of total exports) to Japan, Canada, Mexico, and Peru.

“This is the first time New Zealand has had a free trade agreement with these countries,” Mr Dolan said. “Partnering with them represents opportunities for goods exporters and providers of services.”

Japan is the fourth-largest economy in the world (ranked by OECD according to 2017 gross domestic product), and New Zealand’s third-largest export market for kiwifruit. In the December 2018 year, the value of New Zealand’s kiwifruit exports to Japan was $503 million, behind the European Union ($593 million) and China ($511 million).

In 2018, we exported $129 million worth of wine to Canada, making it New Zealand’s fifth-largest wine market (European Union was top at $594 million). The largest services export to Canada was travel, with Canadian visitors to New Zealand spending $273 million in the December 2018 year.

New Zealand exported $200 million worth of dairy products to Mexico in 2018. Travel exports to Mexico (spending by Mexican visitors to New Zealand) provided $28 million to the New Zealand economy over the same period.

Note that estimates for travel services depends on administrative data. The removal of departure cards in November 2018 has resulted in a change to the data used for estimating travel exports and imports.

© Scoop Media

 
 
 
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