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Thailand and New Zealand are leading players in regional and global trade liberalisation and economic reform.
The familiarity and common understandings that have developed between the two countries during their long history of working together in AFTA/CER, APEC and the WTO will underpin the negotiation of a bilateral CEP. At the same time, both countries are determined to ensure that the agreement supports rather than impedes future regional and multilateral liberalisation. Given the expansion of bilateral and plurilateral trade agreements in the Asia-Pacific region, it will also be important for Thailand and New Zealand to take into account the compatibility of architecture and provisions in a Thai/New Zealand CEP with those in other agreements within the region and in particular those to which they are party.
At the same time as showing a commitment to regional and multilateral initiatives, bilateral trade agreements provide the opportunity for countries to explore innovative approaches which can serve as examples of good practice.
Thailand and New Zealand are both active participants in the AFTA/CER Closer Economic Partnership. Thailand is a leader in economic reform and trade liberalisation in ASEAN. The AFTA/CER CEP, through its work programme, provides the principal mechanism for achieving AFTA/CER's objective of increasing regional trade and investment flows.
In negotiating a comprehensive bilateral CEP, Thailand and New Zealand can demonstrate the possible road forward in lifting the AFTA/CER CEP from its current focus on trade facilitation and capacity building towards trade liberalisation and moves towards greater regional economic integration.
The experience and knowledge of each other's economies derived from negotiating a CEP should aid Thailand and New Zealand in efforts to work more collaboratively in the AFTA/CER context.
Thailand and New Zealand are both active members of APEC and subscribe to the APEC Bogor Goals of free and open trade and investment within the region by 2010 for industrialised economies and 2020 for developing economies. Thailand’s commitment to APEC was shown in its successful hosting of the annual meetings in 2003 while New Zealand was equally successful in hosting the 1999 events.
In recent years there has been a proliferation of preferential trade agreements in the APEC region. The governments of Thailand and New Zealand recognise the importance of being involved in such initiatives but also acknowledge the need to ensure that bilateral agreements ultimately contribute to the APEC principle of open regionalism. Further, by establishing a comprehensive bilateral CEP, Thailand and New Zealand can promote high standards for FTAs in the APEC region.
Achievement of the Bogor Goals is expected to generate significant benefits for member economies through improved trading conditions and technical cooperation. A bilateral CEP between Thailand and New Zealand would bring forward some of those economic gains. Gains come from improved market access, business facilitation and efficiency gains in domestic production patterns in both countries. Through early trade liberalisation in a bilateral CEP, New Zealand and Thai producers will have time to adjust, become more efficient and therefore be in more competitive positions to capitalise on future APEC and multilateral liberalisation.
APEC encourages cooperation among members in technical areas (e.g. customs, business mobility, e-commerce, plant and animal health, food safety and standards) in order to facilitate and secure trade. In a bilateral CEP such cooperation could be concentrated on areas of direct interest to Thailand and New Zealand. A CEP should therefore look for opportunities to build on APEC principles of cooperation. Possible areas for negotiators to look at are outlined in chapter nine.
Thailand and New Zealand are committed to a rules-based multilateral trading system: liberalisation through the WTO is the primary international trade policy objective for both countries. Both Governments acknowledge that the greatest gains from trade liberalisation will accrue from successful multilateral negotiations. Thailand and New Zealand both enjoy a strong profile in the WTO. Former Thai Commerce Minister Dr Supachai Panitchpakdi is the current WTO Director-General while former New Zealand Prime Minister Mike Moore was his immediate predecessor. Successful conclusion of the Doha round of negotiations is in the interests of both countries. A high quality CEP between Thailand and New Zealand can be expected to add impetus to the Doha negotiations.
Under the rules of the WTO, preferential trade agreements between members must be notified to the organisation. In order to ensure that such agreements support the multilateral liberalisation process, Article XXIV of the General Agreement on Tariffs and Trade requires that FTAs between members cover tariff removal on substantially all trade and Article V of the General Agreement on Trade in Services requires that agreements liberalising trade in services have substantial sectoral coverage. In the case of both goods and services, FTAs should not raise barriers to trade with non-members.
Comprehensive sector coverage offers the best assurance of bilateral preferential trade deals supporting rather than undermining multilateral trade liberalisation. As agricultural exporting countries, Thailand and New Zealand cooperate closely in the Cairns Group of WTO members, presenting a common position in the agriculture negotiations. Liberalisation of agricultural trade is however one of the most sensitive and difficult issues in the Doha round. A comprehensive bilateral CEP between Thailand and New Zealand that includes agriculture would send a strong signal of the two countries’ commitment to real trade liberalisation and demonstrate the benefits of opening agriculture trade.
