Anztec signing accelerates Taiwan trade

A formal lunch this week hosted by the NZ Commerce and Industry Office (NZCIO) celebrated early wins from the Anztec free trade agreement that came into force last December. 

The event also celebrated a large number of firsts.

Delegates in the first New Zealand trade delegation since the signing report they were pleased and encouraged by the warmth of the welcome.

The goodwill toward New Zealand as a result of Anztec is almost tangible.  

The Taiwanese are more excited about it than New Zealanders thus far. Its signing made the front page with lead items on television news, which is surprising given that, on the face of it, New Zealand will shortly have access to another economy the same size and affluence as Australia. 

As one mission delegate said, “In Taiwan, New Zealand Made represents a lot more value than in Australia.” 

The 30-strong mission included representatives from Fonterra, Zespri, Kono, Cerebos Gregg’s, Glidepath and several smaller food and beverage companies, film and television, high-tech and education.

Anztechas already delivered duty free trade in all dairy, apples, cherries and wine.  New Zealand meat will be totally tariff free within a year or so, and most other goods will be clear of duties in short order.

Little wonder, then, that New Zealand exports have expanded 30% in the first half of this year; the total is expected to top $1 billion on an annualised basis within a month.  

Taiwan is already New Zealand’s top market for apples and cherries, not so surprising perhaps once it’s understood the Taiwanese take their daily fruit intake as a serious health preservation practice. 

The coverage of the agreement is no less remarkable. While it builds in all the usual bilateral preferences expected from a high quality agreement – generous rules of origin definitions, sanitary and phyto sanitary provisions, liberalising the cross-border trade of services, protecting IP, even going so far as to agree on a list of environmentally friendly goods.

Added to that, Anztec was Taiwan’s first agreement with an OECD economy and the first with a non-diplomatic ally.  

In more firsts it specifically bestows a new open skies agreement between Taiwan and New Zealand, and in a world first, a chapter encourages co-operation between the indigenous peoples of Taiwan and New Zealand.

On the quality front it stands out, as Charles Finny noted at the celebratory lunch, in stark contrast to some of the agreements reached by other economies in the Apec region. Mr Finny was the former lead negotiator of the Anztec agreement for New Zealand and a co-leader of the trade mission.

But given New Zealand’s lack of tariffs with which to reciprocate immediate cuts in consumer prices in New Zealand, the question must arise over the direct benefits that Taiwan stood to gain.  

Why were they prepared to go so fast and so far with Anztec? The answer seems the more interesting as it takes on geopolitical dimensions. 

Taiwan aspires to be part of the Trans Pacific Partnership (TPP) negotiations and by meeting the standard set by Anztec, plainly showed it was easily up to the standard expected.  

It also demonstrates Taiwan can negotiate high quality agreements and is prepared to liberalise even the most sensitive of sectors.  

“The agreement is of huge international interest and having a positive impact on other negotiations underway in this region and under the umbrella of the WTO,” Mr Finny says.  

“For example, at the most recent Apec trade ministers’ meeting the host country was very proactively pushing for work to begin on the Free Trade Agreement for Asia Pacific, FTAAP, which is to involve all APEC economies including Taiwan.”  

On another level, Taiwan has applied pressure to primary goods producers in the US, Japan and Europe. 

Mission co-leader Sir Ken Stevens says delegates were all “surprised and humbled” by the reception. 

“The fact is that though Taiwan is the seventh or eighth largest market for our products by value, our smaller companies have tended to overlook the possibilities for building relationships here and deepening our business connections,” he says..

“As a result of the Anztec agreement and after our visit I am very confident we will see many more New Zealanders visiting Taiwan and doing much more business, including Taiwan and New Zealand businesses forming partnerships and alliances to jointly explore other markets elsewhere.

“We came here to demonstrate we take the relationship with Taiwan very seriously and to show we are determined to develop it even further.”

Gilbert Peterson is the EMA's Communications Manager