International Trade At Crossroads In 2021
2020 was a tough year and economic forecasts – both global and local – suggest that next year will not be easy either. But there are also positive developments, according to Chapman Tripp in its International Trade 2020 – Trends & Insights publication.
Of particular relevance to New Zealand exporters is the recent signing of the Regional Comprehensive Economic Partnership (RCEP), comprising the 10 ASEAN countries and New Zealand, Australia, China, Japan and South Korea.
RCEP demonstrates commitment by a large number of economies to a rules-based trading system in the region. The importance of this – both symbolic and real – shouldn’t be under-estimated in the current uncertain global climate said Dr Tracey Epps, Chapman Tripp’s Trade Law Consultant.
“This is not to suggest that the march toward liberalisation, which has marked the post-WWII era, will be back on track. It has been under challenge since the 2008 Global Financial Crisis (GFC) and has been gathering momentum in response to deep running concerns around inequality, technological displacement, climate change and political populism.”
“But, while President-elect Joe Biden has unequivocally embraced a ‘buy America’ and promote America platform, and will continue to push back against an assertive China, he has also talked about reviving the US leadership role and, we expect, will be prepared to work with other World Trade Organisation (WTO) members to strengthen the rules-based system on which New Zealand relies”.
“It will, however, be necessary for other members to acknowledge the WTO’s shortcomings, some of which are of longstanding, and to implement the reforms that are needed to ensure that it is capable of dealing successfully with the challenges ahead – including climate change,” Epps said.
Although New Zealand had imposed tight anti-Covid border restrictions – devastating two of our largest export industries (tourism and international education) – our goods exports had survived relatively well as had our film and digital sectors. And the Government had kept its eye on the trade ball, engaging in a number of practical initiatives, including:
- a Joint Ministerial Statement with Singapore, subsequently signed by seven other nations, to maintain open supply chains, and
- entering a commitment with Australia, Canada, South Korea and Singapore to enable the free flow of essential goods and services.
“2021 could be a watershed year in which countries decide whether to take the path of introspection and protectionism, as many did after the Great Depression of the 1930s, or whether to refurbish the institutions that underpin internationalism.”
“New Zealand has clearly demonstrated its preference and will be able to use its role as host of the 2021 APEC Conference to influence the economic direction of the Asia-Pacific as it manages the dual challenges of containing Covid and rebuilding regional economies,” adds Epps.