New Zealand, Thailand sign free trade pact
at removing a raft of strict regulatory requirements and trade
tariffs - two areas which have previously hampered food producers'
abilities to export between the two countries, Tom Armitage
reports.
The Closer Economic Partnership (CEP) agreement will be introduced in three stages over the next ten years and has been described by Helen Clark, New Zealand's Prime Minister, as "a major step forward in the bilateral relationship between Thailand and New Zealand".
From 1 July later this year, New Zealand will abolish duty on 5,878 Thai imports, while Thailand will do the same for 2,978 of New Zealand's.
The remaining stages will involve New Zealand scrapping duty on a further 697 imports in 2010, followed by another 858, five years later.
Conversely, Thailand will abolish duty on a further 1,961 products in 2010, while another 520 so-called sensitive products - those products which are particularly vulnerable to import competition and are therefore exempt from trade liberalisation - cow's milk and butter, for instance, will have their respective duties scrapped in 2015.
Dairy will be one of the most likely candidates to feel the benefit of the CEP agreement, as this sector alone accounts for approximately 60 per cent of New Zealand's total export revenue to Thailand.
Thaksin Shinawatra, Thailand's Prime Minister, welcomed Clark's suggestion that New Zealand - home to Fonterra, the world's largest dairy exporter - would be willing to help the Thai dairy sector offset any adverse effects arising from the CEP agreement by providing both resources and expertise.
"The CEP is seen by both sides to be not just of economic importance but also of strategic importance. It will make both countries more competitive in the global market place by encouraging Thais and New Zealanders to pool their expertise, ideas, technology and resources," the New Zealand government said in a press statement.
The announcement is the latest in a series of measures taken by New Zealand to promote trade liberalisation in the region.
New Zealand's stringent health and safety authorities, for instance, have recently been working on draft Sanitary and Phytosanitary Standards (SPSS) for Thai longan (a fruit similar to lychee and currently Thailand's biggest fruit export) in a bid to ease producers' access to the New Zealand market.
"The access to the New Zealand market would be a good reference for Thai products to gain access to other countries which also have a high sanitation standard. Its high standard would also help improve production and quality of Thai products," Shinawatra commented.
Meanwhile, China is reported to have signed up to attend free trade talks with Australia, after it was awarded coveted market-economy status.
The proposed trade deal is the first between China and a major developed economy and according to a joint feasibility study, removing tariffs on Australia's exports to China would increase its export revenue by an estimated AUS$3.2 billion (US$2.5 billion) in the long-term.
