Submissions called for on FTA with US
(Submissions close on December 8)
Press Release by New Zealand Government at 3:13 pm, 15 Oct 2008
The Government is inviting submissions on New Zealand's upcoming FreeTrade Agreement negotiations with the United States as part of theTrans-Pacific Partnership (currently called the P4), Trade Minister PhilGoff said today.
The negotiations were announced in New York on 22 September, following ameeting between Mr Goff, United States Trade Representative Susan Schwaband trade ministers from Singapore, Chile and Brunei (the other P4countries)."The US is the world's largest economy, with more than 270 millionconsumers with a very high average income, notwithstanding recenteconomic difficulties," Phil Goff said."It is New Zealand's second largest export market. Total trade with theUS in the year to June 2008 was worth $8.14 billion, accounting for 9.6per cent of New Zealand's overall total trade. That means this deal isof huge significance to New Zealand.
"An American study on the impact of an FTA with the US, the BergstenReport, published in 2002, estimates that New Zealand exports to the USwould rise by $1 billion."That figure is indicative only. With its membership likely to expandfurther, the Trans-Pacific Partnership will likely bring much greaterbenefit for New Zealand and the US. The strategic benefits to the US should win bipartisan support for the agreement and ensure that it isboth high quality and comprehensive in nature."
In the current world economic climate, improving market access for Kiwiexporters, and the boost to growth, jobs and confidence that thisprovides, makes this negotiation and proposed agreement criticallyimportant."The more favourable New Zealand exchange rate will also boost exporterconfidence. New Zealand's export future however, relies not on cheapnessbut on quality and innovation."Essential to this is the encouragement of research and developmentpromoted by both Labour's 15 per cent tax credit for R and D and the$700 million Fast Forward Fund for the primary sector."National's promise to eliminate these policies is incomprehensible,"Phil Goff said.
"Our major exports to the US, dairy and meat, will benefit significantlythrough the removal of export quotas."Horticultural exports to the US worth $370 million last year currentlyface tariffs of up to 23 per cent. They will also be significantbeneficiaries."Fish and seafood, industrial products, metal products, wood, pulp andpaper account for more than $1.5 billion in New Zealand exports to theUS.These too will be able to trade into the US at lower cost."New Zealand companies will also be able to bid for US Governmentprocurement contracts, worth an estimated $200 billion a year."One example of facilitating new opportunities for New Zealand exportersis in the US Territory of Guam, where US Marines are transferring tofrom Okinawa over the next five years. This involves contracts of around$14 billion for work such as building and support services around thenew base.
An FTA with the US could allow New Zealand companies to bid directly forDefense Department projects."Our high tech companies will also benefit. Christchurch-based TaitElectronics last week welcomed the advantages an FTA with the US wouldbring, allowing them to bid for US Government contracts, currentlyblocked under the Buy American Act."Tait said this would greatly reduce the time and effort taken to meetUS regulations to export its radio equipment into the US. It would alsoallow it to bring its manufacturing base back from Texas to NewZealand," Phil Goff said."Public submissions are an essential part of a consultation process thatwill take place as the negotiations proceed.
The negotiations are due tobegin in March 2009, and are expected to be completed within 12 to 24months," Phil Goff said.Background to the negotiations and an online submission form areavailable on the Ministry of Foreign Affairs and Trade Website,mfat.govt.nz.