PM signs historic trade deal with Singapore + Q&A
14 November 2000
PM signs historic trade deal with Singapore
The Closer Economic Partnership between New Zealand and Singapore will bring exciting new opportunities for the traders, industries and entrepreneurs of each country, Prime Minister Helen Clark said today.
Helen Clark and Singapore Prime Minister Goh Chok Tung today signed the New Zealand/Singapore Closer Economic Partnership Agreement in Singapore, shortly before both leaders departed for the APEC Leaders’ Meeting in Brunei.
The New Zealand/Singapore Closer Economic Partnership will eliminate tariffs on goods traded between the two countries.
The Agreement also provides New Zealand with improved market access opportunities in the Singapore services market, and will reduce compliance costs to New Zealand goods exporters through jointly agreed disciplines on standards.
“The CEP will result in a deepening of the already close trading relationship that exists between Singapore and New Zealand,” said Helen Clark.
“New Zealand's Closer Economic Relationship with Australia has been of enormous benefit to our economy.
"A similar relationship with a key Asian economy will be very useful in promoting trade and investment links and in developing New Zealand’s profile in this dynamic region,” Helen Clark said.
“New Zealand exporters, businesses, and investors view Asian markets as offering exciting potential. They appreciate both the direct and strategic benefits of the CEP. Its sends a clear signal to our APEC partners of our willingness to engage with them."
Singapore is currently New Zealand’s eleventh largest export market, with exports to Singapore in 1999 totalling some $418 million. Total imports from Singapore over the same period were $531.8 million.
Amending legislation to implement the CEP is now before Parliament in New Zealand.
"The aim is to have the legislation passed through all its stages by mid-December so that the Agreement can be ratified and come into effect on 1 January 2001," Helen Clark said.
Attached: Questions and Answers on the CEP
QUESTIONS AND ANSWERS ON CEP:
Why has New Zealand signed this Closer Economic Partnership agreement with Singapore?
The Government has completed this agreement to help New Zealand exporters (of goods and services) and investors get better access to the Singaporean market.
Singapore and New Zealand are similar in many ways. We are both small nations with open economies trading with an increasingly powerful Asian region. Both countries have progressive governments and sound legal and economic structures.
What benefits are there for New Zealand?
The agreement will encourage and facilitate New Zealand exports to Singapore and make it easier for businesses and professionals to operate there.
Trade in services (such as people working on consultancy contracts) is the fastest-growing part of domestic and international trade, as the knowledge economy develops and computer technology becomes more important.
What law changes do we need to make to ratify this agreement?
Very few changes are required to New Zealand law – mainly to eliminate tariffs on Singaporean exports to New Zealand and to amend the Customs and Excise Regulations.
How will this agreement affect New Zealand's textile, footwear, and clothing industries?
It will have minimal impact. Singapore is not a significant manufacturer of textiles, footwear, and clothing. Imports by New Zealand from Singapore of these products are about 0.29 per cent of total textiles, footwear, and clothing imports currently.
Products from Singaporean companies operating in free trade zones outside Singapore (such as Batam Island in Indonesia) will not qualify for duty-free entry under the S-CEP. Under the agreement, goods must contain 40% Singaporean and/or New Zealand content.– this requires elaborate transformation, not just labelling, ironing, and packaging, which is expressly ruled out by the agreement as a qualifying process. Rigorous rules of origin requirements will be enforced by the Customs Service.
What consultation with the public took place over the CEP?
The Singapore Closer Economic Partnership agreement was the subject of extensive consultation before it was agreed on.
The consultation with stakeholders and interested groups included:
six meetings with businesses in both urban and regional centres. Invitations to attend these meetings were circulated through Chambers of Commerce and other business networks.
four hui with Maori groups, organised and publicised by Te Puni Kokiri.
Numerous individual briefings, the CTU and other trade union groups and sector groups such as the Apparel and Textile Federation and the Export Institute.
direct representations from individual companies.
Officials took care to identify groups likely to be interested in the negotiations and to provide opportunities for groups to meet officials.
The views gathered during these consultations informed the negotiations and were incorporated in advice given to ministers.
Isn't New Zealand trading away its sovereignty through deals like the CEP?
No. New Zealand's signing of trade deals such as the S-CEP is akin to entering into a contract. While the government must enter into a binding agreement, it does so on the basis that there are considerable benefits for New Zealand in doing so.
Tariffs on Singaporean goods coming into New Zealand are already low and there will need to be only a few minor law changes to bring the agreement into force.
There is nothing in the S-CEP that prevents future governments from re-negotiating the agreement's provisions, or withdrawing from it completely. The same applies to APEC and the WTO.
Doesn't the CEP threaten the Government's regional development programme?
No. The S-CEP contains no provision to ban the use of domestic subsidies, should the government wish to use them. Singaporeans have already invested in provincial New Zealand. The CEP Agreement is designed to encourage new productive investment into New Zealand, from Singapore to assist our regional development.
What sort of precedent does the CEP set?
Other nations may wish to follow New Zealand and Singapore's example in negotiating Closer Economic Partnerships. New Zealand is willing to negotiate CEP agreements with other countries but any decision to go ahead with potential agreements will be made only on the basis of benefit to New Zealanders.
Isn't this a Trojan horse for other, larger agreements with Asian countries that will make New Zealand more vulnerable?
No. Negotiation of other agreements will only be undertaken if they are in New Zealand's best interests and will improve the living standards of New Zealanders.