Blackburn Consulting Ltd

Blackburn Consulting Ltd

Tropical Issues

Trade for All

The New Zealand Government, through the Ministry of Foreign Affairs and Trade launched its “Trade for All” Policy in August of this year.  A series of consultative meetings is being held throughout New Zealand seeking views from all sectors of the New Zealand economy on how trade can support sustainable and inclusive growth.

The objective is to communicate in plain language and introduce an element of transparency that the Government believes has not been evidence in recent years.  The Government is seeking to ensure that the economic benefits that flow from trade are felt throughout the country in both the regions and the major cities, as well as having a positive impact on women, Maori and small and medium sized enterprises.

An advisory board, chaired by ex MFAT trade specialist David Pine, is being constituted to advise the Government on this strategy. 

New Zealand Government Pacific Reset

The Government has developed a framework for its engagement in the Pacific known as the Pacific Reset.  The principles of engagement have been established as understanding, friendship, mutual benefit, collective ambition and sustainability.

Although not stated in the document, various political statements have indicated that one of the reasons for the Pacific Reset is to counter the ambition of various non-Pacific countries in the region. 

A full copy of the Pacific Reset is available on the MFAT website (www.mfat.govt.nz).

Implementation of the PACER Plus Agreement

The PACER agreement on closer economic relations (PACER Plus) is a trade and economic integration agreement that aims to create jobs, raise standards of living and encourage sustainable economic development in the Pacific Region.  It builds on existing trade agreements – the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) and the original PACER Agreement (2001). 

Whereas SPARTECA is a non-reciprocal Agreement (there is no requirement for the PICs to make concessions, tariff reductions etc to Australia and New Zealand) PACER Plus will involve concessions being made on each side.  The negotiations cover sanitary and phytosanitary measures, technical barriers to trade, Customs procedures, Rules of Origin, trade in goods, trade in services, investment, economic and development cooperation and labour mobility. 

In addition to Australia and New Zealand, the Agreement has been signed by the following parties:

  • Cook Islands

  • Federated States of Micronesia (FSM)

  • Kiribati

  • Nauru

  • Niue

  • Palau

  • Republic of Marshall Islands (RMI)

  • Samoa

  • Solomon Islands 

Tonga, as the depository of the Agreement, has ratified.  Both Australia and New Zealand are undergoing their respective ratification processes at present.  For the Agreement to come into force, at least eight countries must ratify.  It is hoped this will occur by mid-2019.    Work has commenced on establishing an Implementation Unit.

Australia and New Zealand announced a joint A$7.7 million Readiness Package to be available to signatories between signature and entry into force, including Customs, revenue, legislative and communications support to address policy and administrative implications of PACER Plus commitments during the ratification process.

NZ-EU FTA Negotiations

New Zealand and the European Union have announced their agreement to start the process for free trade agreement negotiations.  New Zealand and the EU have a longstanding and close relationship, cemented in the recently concluded Partnership Agreement on Relations and Cooperation.  Agreement was reached in October 2015 to begin working towards a deep, comprehensive and high-quality FTA.

The FTA will be an extension of the previously negotiated Partnership Agreement on Relations and Cooperation (PARC). PARC focuses on political and sectorial cooperation but leaves a gap in the areas of trade, investment and economic cooperation. The European Union is New Zealand's third largest trading partner overall, with trade valued at over NZD19.6 billion for both goods and services for the year to June 2015.

Technical Barriers to Trade, Sanitary and Phytosanitary Standards (SPS) legislation and Intellectual property (GIs, Counterfeit products) are among the key barriers identified and New Zealand’s plant health measures impede some exports from the EU.  Special attention should also be given to trade in services, public procurement and investment.  There will not be an Investor State Dispute Settlement clause in this Agreement.  MFAT is seeking input from the private sector.

The first round of negotiations was held in Brussels in July and the next round will take place in Wellington in October. 

Customs and Excise Act 2018

The new Customs and Excise Act 2018 took effect from 1 October 2018.

Numerous amendments which are relevant to importers have been introduced.  A non-comprehensive list includes:

  • Importers will be able to include a provisional Customs value in certain circumstances.  Duty can be refunded where the final Customs value is lower than the provisional value.   

  • A definition of “sold for export to New Zealand” is introduced which clarifies that when there are multiple sales in a supply chain, the sale that determines the value of goods is the sale prior to the importation of goods into New Zealand.

  • Importers will be able to request a binding Customs ruling for valuation. 

  • An alternative review process is introduced. Any decision of the Chief Executive of Customs to amend an assessment can be reviewed using a new administrative review option, (or appeal to the Customs Appeal Authority as was previously the case). 

  • A new provision extends administrative penalties to cover exports.  Also included is a definition of a “materially incorrect” error or omission for an excise entry and an export entry.

  • Changes have been made to the provisions which authorise the import, manufacture and movement of excisable goods within New Zealand.