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Thailand and New Zealand are open and dynamic economies that depend on international trade for stimulating economic growth. Strong global connections and improved access to markets are fundamental to the economic strategies of both countries. With this in mind, the Governments of Thailand and New Zealand pursue active trade policy agendas and are leaders in regional trade and economic liberalisation and facilitation initiatives.
At the 2003 APEC Leaders’ Meeting in Bangkok, Prime Minister Thaksin Shinawatra of Thailand and Prime Minister Helen Clark of New Zealand agreed to undertake a joint study into a Closer Economic Partnership agreement with subsequent negotiations to be completed by November 2004. The Closer Economic Partnership (CEP) agreement is expected to cover not only comprehensive, preferential liberalisation of trade in goods but also a range of other issues which will extend and deepen ties across the wider trade and investment relationship.
provides information on Thailand’s and New Zealand’s trade and economic policies, the current political and economic relationship, and ways in which Thai and New Zealand business people work together;
Thailand and New Zealand have a longstanding and healthy bilateral relationship. New Zealand has been an active partner in Thailand’s development. A CEP will signal a significant step forward, reflecting the maturity of the relationship.
A CEP between Thailand and New Zealand will also underpin the two countries’ leading role in multilateral and regional trade initiatives and enhance their longstanding cooperation in the WTO, APEC and AFTA/CER contexts. In the pursuit of trade liberalisation, the most important vehicle for both countries is the multilateral process through the WTO. Bilateral CEPs can however bring forward the benefits from international trade liberalisation, help add momentum to the global process, and offer wider benefits. It is therefore important that a Thailand-New Zealand CEP contributes to rather than impedes regional and multilateral trade liberalisation efforts. Thailand and New Zealand will need to take into account the compatibility of architecture and provisions with other agreements in the region and in particular those to which they are party while also exploring innovative approaches which can serve as examples of good practice.
Comprehensive and reciprocal elimination of trade barriers under bilateral CEPs allows people in both countries to benefit from increased competition, lower prices, and a greater variety of goods and services. Given the complementary nature of the two economies a CEP between Thailand and New Zealand is expected to lead to an increase in bilateral trade in some areas. However, as the volume of bilateral trade is relatively small compared to each country’s total trade, the total impact of the CEP on each country’s overall economy is expected to be modest. Similarly, the impact on existing production trends of removing bilateral trade barriers in protected sectors should be minimal and is not expected to harm domestic producers. In most areas, imported goods do not directly compete with domestic production. Expansion in bilateral trade is expected to result from increased demand for Thailand and New Zealand products rather than from displacing domestic production.
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.
A CEP would facilitate trade in services between the two countries through lowering barriers to trade, improving market access, and encouraging mutual recognition of qualifications. The two governments should, however, retain the right to regulate in the public interest, and to provide, regulate and fund public services.
A bilateral CEP would highlight investment possibilities in both markets and improve awareness of the opportunities for joint ventures and strategic alliances. In addition to two-way investment flows a CEP between Thailand and New Zealand would provide a positive signal of greater certainty and economic stability to other overseas investors.
Thai and New Zealand business people are already working together in fields ranging from plastic moulding technology to timber processing to public relations. Greater economic interaction under a CEP should promote mutually beneficial business partnerships involving transfer of technology and skills, sharing of ideas and improvements in business practice, all of which will enhance both countries’ competitiveness in the global market place.
The CEP can also serve as a basis for cooperation between the two governments on other trade-related issues. With the objectives of lowering transaction costs, promoting transparency and facilitating economic activity, cooperation in trade-related areas such as sanitary and phytosanitary measures, customs procedures, technical barriers to trade, competition policy and intellectual property, would benefit businesses in Thailand and New Zealand. In addition, the CEP provides an opportunity to demonstrate both countries’ commitment to sound sustainable development policies, including in respect of labour and the environment.
Negotiation of a CEP offers the opportunity to build a vibrant economic relationship for the 21st century, which will in turn stimulate greater interaction and cooperation between Thais and New Zealanders across the spectrum of the relationship.
