New Zealand and the United Arab Emirates (UAE) have officially begun negotiations to create a Free Trade Agreement, known as the Comprehensive Economic Partnership Agreement (CEPA). This announcement was made by New Zealand Trade Minister Todd McClay and his UAE counterpart, Dr Thani bin Ahmed Al Zeyoudi.
The CEPA aims to enhance trade relations between the two countries, providing New Zealand with better access to the UAE market, which is home to almost 10 million people and is one of the wealthiest countries in the world. Currently, trade between the two nations is already significant, with goods and services exports to the UAE increasing by 17% to $1.02 billion in the year leading up to last September.
McClay expressed optimism about the potential benefits of the agreement, particularly in terms of reducing tariffs on food exports, which would make New Zealand products more competitive in the UAE market. He also highlighted the success of the Free Trade Agreement with China, which saw two-way trade grow from a few hundred million to $38 billion.
While there is no official timeline for the negotiations, both sides are eager to expedite the process. The CEPA serves as a consolation prize for the stalled FTA with the Gulf Co-operation Council (GCC), which includes the UAE, Saudi Arabia, and Kuwait. The agreement with the GCC has faced challenges for over a decade, but recent developments have paved the way for renewed discussions.
The decision to pursue the CEPA comes as a result of shifting policies in the GCC countries, which have become more open to imports from New Zealand. Despite initial concerns about the impact of mass imports on local agriculture, trade between the two regions has continued to grow. In the most recent figures, NZ exports to GCC countries reached $1.9 billion, while imports from the GCC totaled $2.9 billion, primarily in petroleum products.
Both sides have agreed to move forward with negotiations and conduct further discussions to finalize the terms of the agreement. Officials from New Zealand and the UAE will meet in the coming months to review the agreement and provide recommendations to their respective ministers.
Overall, the CEPA represents a significant opportunity for both countries to strengthen their economic ties and enhance trade relations. With the potential for reduced tariffs and increased market access, New Zealand stands to benefit from closer collaboration with one of the wealthiest nations in the world.