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A comprehensive, trade facilitating bilateral closer economic partnership between Thailand and New Zealand will provide real benefits for the people, businesses and economies of both nations.
This study has identified specific ways in which a bilateral CEP could contribute to the wider trade policy and economic objectives of Thailand and New Zealand. Both countries are already leaders in regional economic reform and trade liberalisation, working cooperatively in the Cairns Group at the WTO and as members of APEC. A quality CEP negotiated between Thailand and New Zealand has the potential to set a high standard for preferential trade agreements in the region while at the same time helping to advance the APEC and WTO trade liberalisation processes.
As natural trading partners the aim of a CEP should be to ensure that the greatest possible benefits from bilateral trade accrue to both parties. To achieve this a CEP should include the comprehensive elimination of tariff and other barriers that currently restrict bilateral trade.
Thailand and New Zealand’s complementary trade structures mean that there is large potential for trade creation following a CEP. Exporters in both countries will directly benefit from the removal of tariffs and reduction of other trade barriers allowing greater quantities and a larger variety of goods and services to be exchanged. Equally consumers in Thailand and New Zealand could benefit from increased competition, lower prices and access to a greater selection of goods and services. Thailand’s growing food processing sector would be expected to gain from lower prices when importing quality raw ingredients from New Zealand. In the other direction, New Zealand businesses and consumers stand to benefit from imports of manufactured goods and processed products from Thailand. In services, Thailand and New Zealand have developed different areas of expertise and the sharing of these skills following a CEP could benefit many sectors of society.
As with any preferential trade agreement, it is important that benefits from a CEP only accrue to Thai and New Zealand goods. The rules of origin should be trade facilitating and take into account the relevant domestic production processes in both countries. They should also be readily enforceable.
In general the economic structures of Thailand and New Zealand are complementary. There are however areas where there is competing production which is covered by tariff barriers. Given the size of trade between Thailand and New Zealand and the production capacity in each country, a bilateral CEP is, in isolation, not expected to impact significantly on current industry trends.
The governments of Thailand and New Zealand actively encourage the inflow of overseas investment. A CEP can create a more stable and transparent platform for foreign investment while raising the profile of the two investment markets both bilaterally and internationally.
Economic partnership agreements between two countries can stimulate mutually beneficial cooperation at many levels. This study examined a number of industries where existing trade and investment relationships are producing significant spin-offs and where a CEP could introduce new opportunities. Greater economic interaction under a CEP should in turn lead to exchanges of technology, capital, innovation and knowledge which are all valuable assets for both countries to operate more competitively in the global market place.
Businesses in Thailand and New Zealand can also benefit from improved cooperation between the two governments. A bilateral CEP could include provisions for government-to-government cooperation and facilitate understanding of regulations including in the areas of sanitary and phytosanitary measures, customs procedures, technical barriers to trade, e-commerce and paperless trading, intellectual property and labour and environmental practices. Such collaboration would lower transaction costs for doing business in the partner market and facilitate trade and other economic transactions between Thailand and New Zealand.
Improving transparency of government procurement and removing barriers to trade could provide new opportunities for suppliers of goods and services and allow more cost efficient purchasing for the government agencies of Thailand and New Zealand.
Thailand and New Zealand have a long and warm bilateral relationship across the spectrum of society, the economy and culture. This relationship has steadily developed over the years and a CEP agreement would cement this excellent association into the future.
