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South East Asia FTA to be reviewed

Hon Todd McClay

Minister of Trade


17 October 2016

South East Asia FTA to be reviewed

Trade Minister Todd McClay has announced a review of New Zealand’s Free Trade Agreement (FTA) with South East Asia, which has helped increase trade with the region by 25 per cent since 2010, saying he was concerned that New Zealand businesses are “leaving money on the table”.

The ASEAN-Australia-New Zealand FTA (AANZFTA) covers New Zealand, Australia, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam.

“This region is home to 600 million people, with a combined economic output of NZ$3.5 trillion. It is a huge market for the goods and services we produce and an important source of competitively priced imports that make everyday items cheaper for New Zealanders,” says Mr McClay.

Since coming into force in 2010, the FTA has reduced or eliminated tariffs across many of New Zealand’s exports into key South East Asian markets, and is expected to deliver NZ$71 million in cost-savings for New Zealand exporters this year.

This is expected to rise to around $96 million once the staged elimination of tariffs is complete after 2020.

“However, from a New Zealand perspective, it is not clear that all businesses use the FTA when exporting to South East Asia and this means they could be paying unnecessary tariffs.


“Exporters of both goods and services also face an increasing number of non-tariff barriers in South East Asia, such as import quotas, subsidies, customs delays and technical barriers, which are holding them back,” says Mr McClay.

The Government review will take place ahead of a comprehensive review of AANZFTA by New Zealand, Australia and the ASEAN countries next year.

“This review will help us better understand the New Zealand business perspective going into that broader review and equip us to seek possible improvements to the FTA,” says Mr McClay.

Submissions will close on Friday, 2 December 2016. More information on the review and how to submit can be found on the MFAT website

The introduction of more liberal and transparent trade rules under the FTA have helped grow New Zealand’s trade with ASEAN from NZ$12 billion in 2010 to over NZ$15 billion last year.

ends

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