Global Economic and Trade Update for New Zealand Businesses - 15 October 2021

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We welcome feedback from New Zealand exporters on this report and invite requests for reporting from New Zealand’s network of Embassies and High Commissions(external link). If you would like to be added to the weekly distribution list for this report, please also email us at exports@mfat.net.

Domestic Updates

  • On 13 October, the Government announced(external link) that the parts of Waikato that have been in Alert Level 3 and Northland will remain in Alert Level 3 for a few more days. The Auckland Region will stay at Alert Level 3, Step 1. The rest of New Zealand is at Alert Level 2. These settings will be reviewed on Monday 18 October with a view to steadily and safely changing restrictions. Guidance under alert level settings can be found here(external link). The Wage Subsidy (external link)will continue to be available under the current settings.
  • A coalition of around 25 businesses across a range of sectors has been granted(external link) an exemption by the Director-General of Health, to import and use approved rapid antigen tests. The development comes just a week after Associate Minister of Health Hon Dr Ayesha Verrall announced the Ministry of Business Innovation and Employment is collaborating with the business community and Ministry of Health, to support and accelerate additional levels of testing for New Zealand workers.

Global & Multilateral Updates

  • On 8 October, 136 economies (including New Zealand) formally endorsed(external link) the OECD’s two-Pillar solution to update the international tax framework, addressing long-held concerns about the under-taxation of large multinational enterprises (MNEs) due to digitalisation and globalisation. It specifies a rate of 25% of MNEs residual profits (exceeding 10% of revenue) that will be reallocated to market jurisdictions (Pillar One) and sets a global minimum corporate tax rate of 15% applying to companies with revenue above EUR 750 million (Pillar Two). The agreement was supported by all OECD and G20 countries, representing more than 90% of global GDP.
  • On 6 October, New Zealand, Chile, and Singapore accepted(external link) South Korea’s formal request to commence negotiations on joining the Digital Economy Partnership Agreement (DEPA)(external link). The Republic of Korea is the first partner outside of the three founding members to formally request accession to the DEPA.
  • On 12 October the International Monetary Fund (IMF) released its latest World Economic Outlook(external link) update. The report notes that while global economic recovery continues, its momentum is weakened and held back by the pandemic. Pandemic outbreaks in critical supply chain areas have also resulted in longer than expected disruptions. The global economy is projected to grow 5.9% in 2021 and 4.9% in 2022, 0.1 percentage point lower for 2021 than in the July forecast, largely reflecting downward revisions in advanced and developing economies due to supply chain disruptions and pandemic dynamics. The World Economic Outlook presents the IMF’s analysis of global economic developments during the near and medium term and is usually published twice a year.

Regional Updates

Australia and the Pacific

  • On 1 October, Australia and India Trade Ministers released a joint statement(external link) following the 17th India-Australia Joint Ministerial Commission meeting held face to face in New Delhi that included an updated forward process on bilateral Free Trade Agreement negotiations. Ministers agreed to reach an interim agreement by December 2021 to liberalise and deepen bilateral trade in goods and services, and to conclude negotiations on a full free trade agreement by the end of 2022.
  • Sāmoa resumed one-way flights between Apia and Pago Pago on 8 October.  These flights are to carry approved guest workers to the territory.  The suspension on flights arriving from Pago Pago into Apia remains in force until such time as American Sāmoa’s Government confirms whether the cases in American Sāmoa are of the Delta variant.

Asia

  • New Zealand and 12 other countries participated at Ministerial level in Japan’s fourth Hydrogen Energy Ministerial Meeting held in virtual format on 4 October. Minister of Energy and Resources Hon Megan Woods provided an update during the Ministerial Meeting on New Zealand’s hydrogen roadmap, scheduled for completion in 2022. Japan, South Korea, Australia and Chile have all announced plans for significant investment in developing clean hydrogen production and supply chains.
  • Transport Minister S Iswaran announced updates to Singapore border measures on 9 October during a press conference by the multi-ministry task force handling the COVID-19 pandemic. During the press conference, the Minister provided an overview of how Singapore has eased border restrictions, shortening the quarantine period for high risk travellers from Category III and IV countries from 14 days to 10 days, in line with the quarantine period for COVID-19 patients locally. Several countries have also been shifted from Category III (high risk) to Category II (medium risk) countries. The testing regime (PCR and rapid antigen) has also been refreshed for categories II – IV. A full list of border measures is available here(external link).
  • Noting the experience and confidence gained from the Vaccinated Travel Lanes (VTL) with Brunei and Germany, Minister Iswaran also announced the extension of the VTL to nine more countries: Canada, Denmark, France, Italy, the Netherlands, Spain, the UK and the USA for entry into Singapore on or after 19 October 2021 and South Korea for entry into Singapore on or after 15 November 2021. Fully vaccinated travellers from these countries may enter Singapore without quarantine and just need to undergo COVID-19 PCR testing.

Americas

  • Minister of Agriculture and Minister for Trade and Export Growth Damien O’Connor’s 1-2 October visit to Washington D.C. included a meeting with his counterpart United States Trade Representative Katherine Tai and the Deputy Secretaries of the US Department of Agriculture and the US Department of Commerce. These face-to-face engagements (the first involving a New Zealand minister and US officials since the beginning of the pandemic) covered a range of bilateral trade and economic issues as well as shared priorities for the WTO and APEC.

Market reports released this week

External links

The following links may provide useful information to businesses:

  • NZTE(external link) has a website focused on providing COVID-19 information for exporters. They’ve also launched myNZTE(external link), an interactive digital portal of insights and tools available to all New Zealand exporters.
  • The Treasury releases a weekly economic update(external link) every Friday. Stats NZ has published a data portal(external link) with near real-time economic indicators.
  • MBIE publishes a sector reports series(external link) which provides regularly updated reports on all industry sectors that make up the New Zealand economy. These include official economic data and the challenges and opportunities that face New Zealand’s industry sectors.
  • govt.nz(external link) provides tools and advice from across government to save small businesses’ time and help make the business a success.
  • MFAT has created a tariff finder(external link) which is designed to help goods exporters and importers maximise benefits from New Zealand’s Free Trade Agreements and compare tariffs in 136 other markets.
  • The all of government Trade Barriers website(external link) can be used to register any trade barriers experienced or issues exporting to an offshore market. Queries can be sent via the website or through the MFAT Exporter Helpline 0800 824 605. Enquiries will be sent to the government agency best placed to answer.

To contact our Export Helpdesk

Disclaimer

This information released in this report aligns with the provisions of the Official Information Act 1982. The opinions and analysis expressed in this report are the author’s own and do not necessarily reflect the views or official policy position of the New Zealand Government. The Ministry of Foreign Affairs and Trade and the New Zealand Government take no responsibility for the accuracy of this report.

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