Trade deal opens up a world of opportunities for exporters

OPINION: The long-awaited signing of the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) in Santiago in just a week will be a watershed moment for New Zealand businesses, particularly our exporters.

New Zealand has been a leading advocate of the CPTPP startging from when it was the TPP, and even after the withdrawal of the United States.

The CPTPP brings together 11 countries whose economies still account for 13.5 per cent of the world’s GDP – a total of US$10 trillion.

Our fellow 10 CPTPP members are the destination for nearly a third of our overall exports, so partnering with them is a huge opportunity opening up for New Zealand exporters.

Even following the withdrawal of the US, the CPTPP is estimated to add between $1.2b and $4b to annual GDP growth once the overall impact of the deal is fully realised.

And it is worth remembering that while the tariff savings from the FTA with China were initially estimated at $115m a year, trade growth since then has seen annual exports to China quadruple.

New Zealand now has access to Japan, Canada, Mexico and Peru. We export more than $5b worth of goods and services to those countries but have never had freetrade agreements with them.

Tariffs will be eliminated on 92 per cent of exports to those markets, which cost nearly $300m last year and put New Zealand exporters on the back foot in a global market place.

The reduction of tariffs for beef

Our industries, and therefore our jobs, aren't affected by tariff reductions.

– down to 9 per cent over 16 years – allows our exporters to finally be competitive while extracting a premium price for their products.

Many of the benefits from the agreement will go to the regions where our primary sector farmers and growers are based.

Fears that jobs will go overseas are likely to remain unfounded – as New Zealand has very few tariffs our industries, and therefore our jobs, aren’t affected by tariff reductions.

More than 620,000 New Zealanders already have jobs that depend on exports, and access to the markets of Japan, Canada, Mexico and Peru will provide new export destinations.

And countries like Colombia, Korea, Thailand and the Philippines may yet join the agreement.

Having New Zealand businesses succeed internationally will create jobs and opportunities locally, so the CPTPP is set to have benefits across the country.

❚ Kirk Hope is the chief executive of BusinessNZ.