New Zealand signs trade deal with the UAE

New Zealand’s prime minister told CNBC that the country will look beyond its own backyard for trade opportunities as the South Pacific island nation signs an economic partnership with the United Arab Emirates (UAE).

The free trade agreement, formally known as the Comprehensive Economic Partnership Agreement (CEPA), is seen by Prime Minister Christopher Luxon as a chance to expand bilateral trade between the countries and make the UAE one of the largest island markets in the Middle East.

“We’ve had a long relationship of more than 40 years of diplomatic recognition, and really the chance now for us is to deepen and expand the economic relationship,” Luxon told CNBC on Monday.

“That’s why the signing of the CEPA and also the bilateral investment treaty is really important, because it’s actually two small advanced economies in the world that actually have a lot in common and a
a lot of shared values, and we want to be able to work together and build that relationship.”

New Zealand’s key exports to the UAE include dairy products, industrial products, meat, horticultural products and travel services, the government said when it announced the deal. The deal, expected to take effect later this year, comes as the government aims to double the value of exports in 10 years. He said the CEPA would mean 99% of New Zealand goods exporters would be able to access the UAE market duty-free.

“This includes all New Zealand dairy, red meat, horticulture and industrial products immediately when the Agreement comes into force,” he said.

“One in four of our jobs in New Zealand are very much related to trade,” Luxon, leader of the centre-right New Zealand National Party which is in power until the end of 2023, said on Monday at CNBC’s Dan Murphy in Abu Dhabi.

“When you see a New Zealand company exporting to the world, it is able to pay its workers.
7% higher wages and salaries, and are often our most productive companies. The message to people back home is that they understand that we are a trading nation. We don’t get rich just by selling things to others in the South Pacific or New Zealand,” he said.

“We really need to send great products and services to the world, of which there is a great demand, and make sure that we open new markets like the Middle East to get these products as well. In this, we bring more money. back in home, and this, obviously, is the way in which we can provide better public services such as health and education,” added Luxon.

New Zealand needs an economic boost after its economy contracted last year and entered recession territory in the third quarter. The economy shrank by 1% in the July-September quarter, data published in December show.

The fall follows a 1.1% contraction in the previous quarter. Two straight quarters of negative growth is widely considered a technical recession.

Luxon said there was no doubt that the past three years had been “a very challenging time” for the country, but he said inflation, to 2.2% in Octoberit was under control and interest rates were down. The country’s central bank has reported that another facility is due at their next meeting on February 19.

“We have business confidence at a 10-year high. We have consumer confidence at a three-year high. the confidence of farmers the highest it has been since 2017 so we know we have the conditions for people to believe there is a better future,” he added.

“Now we have to convert and really drive growth, and that’s where these stronger international trade links are, but also encourage inbound investment in New Zealand as well.”

Asked how he felt that Donald Trump returns to power in the United States, and the possibility of tariffs on exports to the States as the president-elect has widely reported (with ​​a potential universal tariff of 10 % or 20% on all goods imported into the country). US), Luxon said it was in “wait and see” mode.

“We will work well with whatever Administration the American people select, and they have
he chose Donald Trump and the Republican Administration. And I have every confidence that we will work very constructively with them. We have to wait and see what the tariff policy is in terms of how it actually plays out, or what is played out,” he said.