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The New Zealand/Hong Kong, China Closer Economic Partnership (CEP) was concluded by officials in the margins of APEC and announced jointly by the Prime Minister and Hong Kong's Chief Executive Donald Tsang on Friday 13 November. Officials must complete legal verification of the agreement before it can be signed (likely to be around March 2010). Details of the agreement will be made public following signature.
New Zealand's trade with Hong Kong is currently worth $823 million per annum. Hong Kong is currently New Zealand's 9th largest export market. The CEP further enhances New Zealand's economic integration in Asia, following the conclusion of Free Trade Agreements with Thailand, Singapore, China, ASEAN, and Malaysia.
North Asia is an area of increasing opportunity for New Zealand exporters. Key economies like China are expected to rebound strongly from the global financial crisis. Hong Kong is strategically well-positioned to benefit from any resurgence in the Chinese (and wider) regional economy. Hong Kong can also serve as a platform for New Zealand business to pursue opportunities in China, including by accessing some of the opportunities created through Hong Kong’s Closer Economic Partnership Agreement with China. The New Zealand/Hong Kong, China CEP agreement can serve to enhance the profile and awareness of New Zealand goods and services in Hong Kong (and to the close to 30 million visitors currently passing through it every year). As part of New Zealand's general activities to promote services sectors of particular interest, New Zealand and Hong Kong recently signed an Arrangement on Cooperation in Wine-related Business and have concluded negotiations for an Arrangement on Cooperation between Audio-Visual (Film and Digital Entertainment) Industries.
New Zealand commenced a 'Closer Economic Partnership' (CEP) negotiation with Hong Kong in 2001. Talks were suspended in late 2002 after five rounds of negotiation. The two countries maintained a constructive relationship over the intervening years, supported by close business, educational and other ties. Following informal discussions, both Parties have agreed to resume negotiations towards a CEP and are hopeful that it will be possible to find a way through the difficulties which led to the suspension.
The first round of resumed negotiations between New Zealand and Hong Kong was held in Wellington from 5-8 May 2009 and a second round of negotiations was held in Hong Kong from 6-10 July 2009. The third round of negotiations was held in Wellington from 24-28 August 2009.
New Zealand sought commercially-meaningful commitments from Hong Kong in relation to goods, services, investment and government procurement, along with trade facilitating outcomes on customs, technical barriers to trade (TBT), and sanitary and phytosanitary measures (SPS), as well as side agreements on environment and labour.
As an economy with applied tariffs at zero, Hong Kong did not offer New Zealand the usual gains sought in bilateral trade agreements of reduced tariffs. However, New Zealand did have an interest in getting a commitment from Hong Kong to bind their tariffs at zero. In addition, commitments were sought in the areas of services, investment, and government procurement, as well as commitments in relation to TBT, SPS and customs cooperation so as to facilitate trade flows between us.
