Taiwan and New Zealand signed an economic cooperation agreement (ECA) on Thursday in Wellington, opening a new chapter in trade relations between the two countries.
Negotiated in accordance with World Trade Organization rules, the agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation (Anztec) contains 25 chapters, including some WTO-plus provisions more favorable than standard obligations set by the organization.
In addition to providing general market access, Anztec covers issues such as e-commerce, competition policy, environment and cooperation between the indigenous peoples of Taiwan and New Zealand. As a comprehensive ECA, it aims to eliminate tariffs altogether.
Two-way trade between Taipei and Wellington totaled $1.28 billion in 2012. Taiwan ranks No. 12 and No. 15 among New Zealand’s export markets and import suppliers, respectively. It imports primarily agricultural products from New Zealand, while its principal exports to the South Pacific nation are electronic and electrical goods, refined petroleum products and metals.
Given the strongly complementary nature of the economies of the two countries, the accord stands to be very beneficial to Taiwan’s industrial sectors, especially petrochemicals, semiconductors, stainless steel, electronic components, plastics and precision machinery, while Taiwan’s market will be open to the choice of fruit, lamb and mutton, dairy products and wine produced in New Zealand.
In the process of joining the WTO, Taiwan undertook a number of liberalization measures and agreements regarding trade in services, enabling it to enter into Anztec based largely on existing conditions in this sector.
For its part, New Zealand provided WTO-plus provisions opening construction, urban planning, landscape architecture, research and development, and environmental services to Taiwan, while also providing access for Chinese-language teachers and other professionals, as well as film and television co-production and open skies for air transport services. These arrangements on trade in services are expected to generate valuable business cooperation opportunities for firms from both sides.
Anztec underscores Taiwan’s commitment to trade liberalization, readiness to seek similar deals with other trading partners and determination to participate in regional economic integration. The agreement will help create favorable conditions for Taiwan’s accession to the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP), as New Zealand is a member of both.
The TPP is a proposed trade agreement also comprising negotiating partners Australia, Brunei, Canada, Chile, Malaysia, Mexico, Peru, Singapore, Vietnam and the United States. Other nations such as Japan and South Korea are also looking to join discussions on the nascent pact.
Driven by the Association of Southeast Asian Nations, the RCEP is made up of 16 economies, including Australia, India, Japan and mainland China. If realized, the trading bloc will permit a greater flow of goods and services and encompasses a combined economic output of $20 trillion, or almost one-third of the global economy.