Phạm Ngọc Thái

The CPTPP trade deal is set to become a reality with a sixth country, Australia, having lodged its ratification documents.

The deal will enter into force on December 30, Trade Minister David Parker announced this morning after receiving Australia’s paperwork triggering a 60-day countdown.

“This is a momentous day, not just for New Zealand…but for world trade,” Parker said.

The World Trade Organisation was in a parlous state at present and the alternatives were plurilateral agreements.

“The most important one on offer at the moment is the CPTPP…It has benefits that will spread throughout the economy to every person in New Zealand from the factory floor to the farm owner, to all of the other service industries that rely upon our export industries.”

The paperwork was handed over at the Beehive by Australian High Commissioner Ewen McDonald.

New Zealand is the depositary of the deal, which was launched in 2008.

McDonald said he acknowledged the leadership of New Zealand in the CPTPP together with Japan and Australia.

Now officially called the Comprehensive and Progressive Agreement on Trans Pacific Partnership, the other countries that have ratified are Japan, Canada, Mexico, and New Zealand.

The countries yet to ratify are Chile, Malaysia, Peru, Vietnam and Brunei.

The deal will mark the first free trade deal for New Zealand with Japan, the third largest economy in the world, and Mexico and Canada.

The first round of tariff cuts for New Zealand exporters will take effect on December 30 and because of the timing, a second round will take place on January 1, 2019, Parker said.

“New Zealand’s ratification means that from day one our businesses will be able to take advantage of improved trading conditions and lower tariffs,” Parker said.

“Economic modelling shows exports, the New Zealand standard of living, and wages, will increase as a consequence,” Parker said.

The CPTPP markets are collectively home to 480 million consumers and comprise 13.5 per cent of world GDP.

The United States led the TPP negotiations under President Barack Obama but withdrew from the deal after Donald Trump was sworn in as President in January 2017.

Negotiations among the remaining 11 countries were held throughout 2017 and a decision was made to continue without the US.

Labour opposed the TPP in Opposition but made enough changes after taking power to announce its support about a year ago.

It was renamed the CPTPP at the instigation of Canada.

Parker said the CPTPP was a “fantastic protection and advancement of New Zealand’s trading interests.”

“The protective benefits of this agreement and the signal it send to the rest of the world that there is a new rules-based order out there can buy into if they want is an incredibly signal at this particular time.”

Parker said it was a high quality agreement and he upgraded his previous estimate of the pact from a seven out of 10.

“I reckon I’m up to an eight or nine now because the relative degradation of other things means it is just so much more important than it was.

“It is a high quality agreement and if we were offered other agreement that were this high quality we would be in them with a flash.”

Citing some specific benefits, Parker said fish exports to Mexico currently face 20 per cent tariffs.

Buttercup squash growers, mainly is Gisborne, would be saving $1.5 million a year in tariff reductions.

Tariffs on beef into Japan will reduce from 38 per cent to 9 per cent over a longer period of time.

Tariffs on wine into Canada will go immediately.

Horticultural exports, including carrot and radish seed, would have much lower tariffs.

Other countries that have expressed an interest in joining the CPTPP include Colombia, Britain, South Korea, Indonesia, Thailand and China.

TPP-CPTPP TIMELINE
1999
National trade minister Lockwood Smith clinches NZ-Singapore Closer Economic Partnership (CEP). But Clinton’s US rejects invitation by NZ to expand to five-party trade talks including Australia and Chile.

2001
New Zealand – Singapore Closer Economic Partnership (CEP) begins after new Labour passes related laws.

2005
Chile and Brunei join CEP making it the P4, also known as Trans Pacific Strategic Economic Partnership – but it is minus an investment and financial services chapter.

2007
July: Trade minister Phil Goff talks to US Trade Representative Susan Schwab in Cairns about the US joining P4, which it scheduled to start investment and financial services talks.

2008
September: US Trade Rep Schwab announces from New York US will enter negotiations to become a full partner in the TPP (P4), under outgoing President, George W Bush.
November: New Trade Minister Tim Groser announces at Apec in Peru that Australia, Vietnam and Peru will join negotiations, yet to be started.

2009
February: New US President Barack Obama delays joining until his Administration assesses it.
November: United States Administration confirms it will join TPP talks.

2010
March: First round of TPP talks among eight countries begins in Melbourne
October: Malaysia joins TPP talks.
November: Japan announces it will consider joining TPP talks.

2011
March: Tsunami catastrophe delays Japan’s consideration.
November: Obama hosting Apec Hawaii holds TPP meeting and Honolulu Declaration agrees to comprehensive TPP.
2012
June: Mexico and Canada announce they will join TPP talks, making 11. Japan still considering.

2013
March: Japan under PM Shinzo Abe announces it will join TPP talks.

2015
October: TPP talks conclude in Atlanta, US.

2016
Countries begin domestic processes to ratify TPP but in the US, presidential candidates Donald Trump and Hillary Clinton promise to withdraw from the deal. Labour in NZ decides to oppose TPP.

2017
January: President Donald Trump withdraws from TPP.
November: TPP becomes CPTPP ahead of Apec summit in Vietnam and Labour agrees to support it with modifications. Planned CPTPP signing by leaders at Apec cancelled after no-show at meeting by Canada.

2018
March: CPTPP signed by ministers in Chile. Domestic ratification processes begin.
October: Sixth signatory, Australia, triggers entry into force of CPTPP on December 30.

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12151868

Commission presents EU-Vietnam trade and investment agreements for signature and conclusion

The European Commission today adopted the EU-Vietnam trade and investment agreements, paving the way for their signature and conclusion. Through this adoption, the Commission is demonstrating its commitment to putting these agreements in place as soon as possible.

The trade agreement will eliminate virtually all tariffs on goods traded between the two sides. The agreement also includes a strong, legally binding commitment to sustainable development, including the respect of human rights, labour rights, environmental protection and the fight against climate change, with an explicit reference to the Paris Agreement.

President of the European Commission Jean-Claude Juncker said: “The trade and investment agreements with Vietnam are exemplary of Europe’s trade policy. They bring unprecedented advantages and benefits for European and Vietnamese companies, workers and consumers. They take fully into account the economic differences between the two sides. They promote a rules- and values-based trade policy with strong and clear commitments on sustainable development and human rights. By adopting them a few hours before welcoming the participants in the ASEM-EU Summit in Brussels, the Commission shows its commitment to open trade and engagement with Asia. I now expect the European Parliament and EU Member States to do the necessary for the agreements to enter into force as soon as possible”.

Commissioner for Trade Cecilia Malmström said: “The Commission has now delivered two valuable and progressive agreements with Vietnam that I am convinced the European Parliament and EU Member States can support. Vietnam has massive potential for EU exporters and investors to do business, both now and in the future. It is one of the fastest-growing economies in Southeast Asia, with a vibrant market of more than 95 million consumers, an emerging middle class and a young, dynamic workforce. Through our agreements, we also help spread European high standards and create possibilities for in-depth discussions on human rights and the protection of citizens. I hope the Council and the European Parliament will approve the agreements swiftly to allow businesses, workers, farmers and consumers to reap the benefits as soon as possible.”

The trade agreement will eliminate over 99% of customs duties on goods traded between the two sides. Vietnam will remove 65% of import duties on EU exports from entry into force of the agreement, with the remainder of duties being gradually eliminated over a 10-year period, to take into account that Vietnam is a developing country. The agreement also contains specific provisions to address non-tariff barriers in the automotive sector, and will provide protection for 169 traditional European food and drink products in Vietnam, the so-called Geographical Indications, like Rioja wine or Roquefort cheese. Through the agreement, EU companies will be able to participate on an equal footing with domestic companies in bids for procurement tenders with Vietnamese authorities and state-owned enterprises.

Besides offering significant economic opportunities, the trade agreement also ensures that trade, investment and sustainable development go hand in hand, by setting the highest standards of labour, safety, environmental and consumer protection, ensuring that there is no ‘race to the bottom’ to attract trade and investment. The agreement commits the two parties to respect and effectively implement the principles of the International Labour Organisation (ILO) concerning fundamental rights at work; and to implement international environmental agreements, such as the Paris Agreement; to act in favour of the conservation and sustainable management of wildlife, biodiversity, forestry and fisheries; and to involve civil society in the monitoring the implementation of these commitments by both sides.

The trade agreement includes an institutional and legal link to the EU-Vietnam Partnership and Cooperation Agreement, allowing appropriate action in the case of breaches of human rights.

The investment protection agreement, meanwhile, includes modern rules on investment protection enforceable through the new Investment Court System and ensures that the right of the governments on both sides to regulate in the interest of their citizens is preserved. It will replace the bilateral investment agreements that 21 EU Members States currently have in place with Vietnam.

Alongside the agreement recently reached with Singapore, this agreement will make further strides towards setting high standards and rules in the ASEAN region, helping to pave the way for a future region-to-region trade and investment agreement.

Background

Vietnam is the EU’s second largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth €47.6 billion a year and €3.6 billion as it comes to services. While EU investment stock in Vietnam remains modest standing at €8.3 billion in 2016, an increasing number of European companies are establishing there to set up a hub to serve the Mekong region. Main EU imports from Vietnam include telecommunications equipment, clothing and food products. The EU mainly exports to Vietnam goods such as machinery and transport equipment, chemicals and agricultural products.

Next steps

The Commission is now submitting to the Council the proposals for signature and conclusion of both agreements. Once authorised by the Council, the agreements will be signed and presented to the European Parliament for consent. Once the European Parliament has given its consent, the trade agreement can then be concluded by the Council and enter into force. The investment protection agreement with Vietnam will be ratified by Member States according to their respective internal procedures.

 

http://trade.ec.europa.eu/doclib/press/index.cfm?id=1921