Australia has become the sixth country to ratify the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) Agreement, after Japan, Singapore, Mexico, New Zealand and Canada.
The CPTPP will enter into force before the end of this year with the first tariff reductions taking effect in January 2019.
Immediate benefits to New Zealand exporters in new markets
The benefit to New Zealand exporters will be immediate, particularly in those countries with which New Zealand has not previously had a free trade agreement – Japan, Mexico and Canada.
All tariffs on New Zealand wine will be eliminated, for example, including to Canada, which is our fourth largest wine-market. But preferential tariff access is not automatic - goods will need to meet the rules of origin requirements and be accompanied by appropriate documentation.
Businesses can check the tariff rates that apply to their exports under CPTPP, and the applicable rules of origin, by using the Ministry of Foreign Affairs and Trade's Tariff Finder (https://tariff-finder.fta.govt.nz/ ).
Service suppliers and investors will also derive benefits. Each CPTPP member has undertaken not to limit access into their market, or discriminate in favour of their own against service suppliers from other Parties.
This will provide certainty to businesses looking to expand offshore and invest in the region.
Of particular interest to New Zealand exporters are the rules on e-commerce. These are designed to ensure that e-commerce can flow freely between countries while allowing them to take necessary measures such as protecting their citizens' privacy.
What happens next?
Five countries have yet to ratify: Brunei Darussalam, Chile, Malaysia, Peru and Viet Nam. Of these, Peru is the only country with which New Zealand does not have a previous free trade agreement, making its ratification of particular interest to open up new market opportunities.
Other countries have also expressed formal interest in negotiating accession to CPTPP, including Columbia, Korea, and (despite its lack of a Pacific coastline) the United Kingdom.
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.