Most Read Contributor in New Zealand, September 2016
New Zealand's FTA negotiations continue apace. The key
developments are summarised below
On 1 August 2010, the
NZ-Malaysia FTA (signed in October 2009) entered into force.
This FTA built on concessions made in the ASEAN- Australia-NZ FTA
(AANZFTA) which entered into force earlier this
Although the AANZFTA contained an investment chapter, this does
not apply as between New Zealand and Australia due to a February
2009 exchange of letters between the two countries' trade
ministers. One of the reasons for this carve-out is that New
Zealand and Australia have been negotiating an
investment protocol to the Closer Economic Relations (CER)
Agreement between the two countries. The text of that protocol
has reportedly now been agreed and is subject to legal verification
before being presented for signature. The timing of its execution
may indicate the extent to which the Gillard government is focused
on trans-Tasman integration issues.
It will be interesting to compare that text to the investment
protocol due to be negotiated between New Zealand and Hong Kong. In
March 2010, New Zealand and Hong Kong signed a
Closer Economic Partnership Agreement which did not include an
investment chapter. At the same time, the parties signed
side-letters recording a mutual intent to negotiate a separate
investment protocol, stating:
The Investment Protocol shall
build on and be broader in scope than the Agreement between the
Government of New Zealand and the Government of Hong Kong for the
Promotion and Protection of Investments done at Hong Kong on 6 July
1995, and its provisions shall be drafted with reference to the New
Zealand - China Free Trade Agreement done at Beijing on 7 April
There is apparently genuine intent on both sides to conclude
this protocol. It is to be hoped that the result is indeed
"broader in scope" than the 1995 Agreement
between New Zealand and Hong Kong, which does not offer substantive
enforceable protection to New Zealand investors.
New Zealand and Russia announced at the beginning of June 2010
begin scoping discussions for an FTA between the two countries
(which would extend also to Belarus and Kazakhstan, with which
Russia is in a customs union). The first round of these discussions
has been completed successfully. The second round is scheduled to
take place in Wellington in October 2010. These are not yet FTA
negotiations, but preliminary discussions to determine whether FTA
negotiations are viable. Present intentions do, however, appear to
be towards producing a comprehensive FTA with investment,
intellectual property and labour protections. Russia is not
presently a member of the WTO. Indeed, aside from its customs union
with Belarus and Kazakhstan, it does not appear to be a party to
any FTAs (it has signed a 1994 FTA with the other CIS countries,
but this has not entered into force). Accordingly, signing an FTA
with Russia would be a significant strategic step for New Zealand.
Vietnam may, however, make faster progress: on 17 September 2010,
Vietnam and Russia announced that they had agreed to begin FTA
negotiations in earnest.
New Zealand's FTA negotiations with Korea were given a
resuscitative boost by Prime Minister John Key's visit to Seoul
in July 2010. Progress on the talks had "largely stalled", with Korea negotiators
unconvinced of the value of concessions an already essentially
tariff-free New Zealand was able to offer in exchange for seeking
better access for New Zealand's agricultural produce. Despite
Mr Key's intervention, progress does not appear to have picked
up, with no further negotiating rounds held since May 2010. Like
many modern FTA negotiations, the way through – if there
is one – is likely to lie in liberalising non-goods trade
(such as in services and investment), strengthening protection in
areas of mutual interest (such as intellectual property),
harmonising regulatory non-tariff barriers, and facilitating the
movement of people between the two countries (for instance through
promoting student exchange and temporary worker programmes).
Korea's 2009 FTA with the EU is now scheduled to enter into
force in July 2010 after Italy confirmed it would not veto the FTA
provided its implementation was delayed by six months. The EU-Korea
FTA will be an important reference point for both New Zealand, as
will the on-going (and seemingly productive) Korea-Australia
Also continuing are the Trans-Pacific Partnership
Agreement (TPP) negotiations with several
Pacific Rim countries, including the United States. A second round
was held in San Francisco in June 2010. Following an intersessional
meeting in Lima held last month, the third round commences in
Brunei in early October 2010. Negotiations are expected to continue
into 2011. (Separately, the United States in mid-September 2010
two new WTO cases against China, perhaps underlining the
economic rivalry which is fuelling the United States' interest
in concluding a regional trade agreement to which China is not a
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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