What we are negotiating
New Zealand is aiming for a high-quality, comprehensive, and progressive trade agreement with the Pacific Alliance.
Negotiations cover many issues that are common to free trade agreements, as well as some newer progressive elements. A full list of issues and a summary of New Zealand’s objectives for each area is set out below.
Consistent with New Zealand’s approach to goods market access in every free trade agreement negotiation, we are seeking comprehensive elimination of tariffs on all goods within commercially meaningful timeframes. This will ensure New Zealand exporters can compete on an equal footing with exporters from other countries that currently benefit from tariff-free access in Pacific Alliance markets.
We are also seeking rules that are consistent with World Trade Organization Agreements, help address current and future non-tariff measures, and provide certainty and predictability for exporters.
New Zealand’s approach reflects that non-tariff measures can have a significant impact on trade, in some cases as significant as tariffs or more so. We are seeking to ensure that non-tariff measures are only applied if they are fully consistent with WTO rules and additional obligations included in the Agreement, and that such measures are applied in a transparent way.
New Zealand is seeking Rules of Origin provisions that establish the framework to determine what goods are eligible for tariff preference under the Agreement, the documentary and procedural requirements businesses need to follow to claim that preference, and verification procedures to be followed by enforcement agencies.
New Zealand’s overall approach is based on the principles of simplicity, transparency, cost minimisation, and trade facilitation.
"Product-specific rules" will establish the level of manufacturing or processing, or value that must be added, in order for a good to qualify for preferential tariff treatment under the Agreement.
New Zealand’s manufacturing industry is predominantly made up of small- and medium-sized enterprises, many of which have developed specialised products for niche markets.
We operate from a relatively narrow domestic base and therefore rely on imported materials in the production of our exports.
For these reasons, New Zealand is seeking product-specific rules that reflect the principle of "substantial transformation" and that support access to global supply chains.
New Zealand prefers product-specific rules that are based primarily on the Change of Tariff Classification methodology, with the use of other rules for specific products where appropriate (for example, chemical process rules or value-add rules).
Given the diversity in business models and methods of accounting, where possible, we are seeking a range of optional rules to provide business with flexibility and choice.
Other key provisions will include providing for the accumulation of inputs across the Parties to the Agreement and trade facilitatory consignment rules that reflect the reality of transportation and logistics practices.
Additional provisions will also describe the process for claiming preference for goods imported under the agreement, and the rights and obligations imposed on traders and customs administrations in the event of verification activity.
New Zealand is seeking a high quality Customs Procedures and Trade Facilitation Chapter that includes outcomes that add to existing agreements, particularly the World Trade Organization Trade Facilitation Agreement.
In particular, we are seeking outcomes that provide a predictable, consistent, and transparent environment for the conduct of trade.
This includes exploring ways to modernise and simplify relevant rules and procedures related to import, export and transit and transhipment of goods. Specific provisions we are seeking in the free trade agreement include:
- that goods will be valued in accordance with the General Agreement on Tariffs and Trade and Customs Valuation Agreement;
- access to Advanced Rulings on tariff classification, origin and valuation for traders;
- expedited release of goods for express shipments and perishable goods;
- exporter enquiry points;
- review and appeal procedures for traders.
We will also seek to establish a framework for cooperation between respective customs authorities to support future reviews and enhancement of customs procedures.
New Zealand is seeking trade remedies provisions that reflect existing World Trade Organization rules in relation to anti-dumping, subsidies, countervailing measures, and safeguards.
New Zealand is seeking an SPS Chapter that sets out the understanding and commitments of our FTA partners with respect to trade-related matters concerning human, animal, or plant life or health, including on food safety and biosecurity practices and processes.
New Zealand considers a Chapter should build on existing World Trade Organization obligations under the SPS Agreement.
The Chapter should establish a framework covering transparency, equivalence, regionalisation, risk analysis, audits, certification, import checks, and technical consultations on SPS matters.
This approach reinforces a science-based approach to the protection of human, animal, or plant life or health, while facilitating trade.
New Zealand is seeking a high quality chapter that addresses technical barriers to trade that impact trade with Pacific Alliance countries. By building on existing World Trade Organization obligations, New Zealand’s aim is for provisions in this area to facilitate trade and reduce impediments and costs for exporters.
This approach reflects that product standards, technical regulations, and conformity assessment procedures can introduce significant, unnecessary costs to trade.
For this reason, we will be promoting provisions that enable recognising the equivalence of New Zealand’s regulatory approaches, standards and conformity assessment results for the purposes of trade with the Pacific Alliance.
Given these are long-term objectives, the Chapter should promote cooperation to build strong partnerships between regulators, increase information sharing and communication, and establish mechanisms to address TBT issues over time.
Product-specific regulatory approaches may also be considered, depending on interest among New Zealand sectors and requests from Pacific Alliance countries.
Recognising the increasingly important role of services exports in the New Zealand economy, we are seeking high-quality, commercially meaningful outcomes that support services exports, provide increased certainty and predictability for New Zealand business, while protecting the Government’s right to regulate for legitimate public policy purposes, including in relation to public services.
The following rules should be the foundation of a Chapter to support New Zealand services exporters wanting to do business in Pacific Alliance countries:
- guaranteeing access to markets and not limiting foreign participation through quotas or other limitations (a "market access" obligation);
- treating New Zealanders the same as local service providers and other foreign companies operating in the market ("national treatment" and "most-favoured nation" obligations); and
- allowing online and distance-delivery of services, and not requiring an in-market presence to supply a service (a "local presence" obligation)
Reflecting the approach in many New Zealand trade agreements, we will be seeking commitments on these obligations on a "negative list" basis.
This approach means that all sectors will be covered by the free trade agreement unless they are explicitly excluded or limited through exceptions in the Chapter or country-specific schedules.
It also ensures the Agreement will stay up-to-date over time (by automatically reflecting future regulatory changes, with some exceptions), provides certainty and transparency for business, and enables clear exceptions to be taken for important public policy areas.
New Zealand will be making market access requests of each Pacific Alliance country.
These will reflect New Zealand’s export interests and specific feedback the Ministry receives from New Zealand exporters on market access priorities and regulatory barriers they face in Chile, Colombia, Mexico, and Peru.
We will also seek rules to encourage the transparent and predictable application of licencing and qualifications requirements and procedures, and provisions that require due process when exporters need to apply or seek regulatory approval to supply a service.
We are seeking a Chapter that supports New Zealand investment in Pacific Alliance markets, progressively removes regulatory barriers over time, includes rules that ensure fair treatment of investments once made, and protects the Government’s right to regulate for legitimate public policy purposes.
New Zealand opposes investor-state dispute settlement clauses. We have been clear that New Zealand will not support the inclusion of investor-state dispute settlement in a New Zealand-Pacific Alliance Free Trade Agreement.
New Zealand supports using a similar structure to the Cross-Border Trade in Services Chapter to make commitments that allow New Zealanders to invest and establish businesses in Pacific Alliance markets.
This includes national treatment, and most-favoured nation commitments and the following additional outcomes:
- prohibiting nationality restrictions on the appointment of senior managers or boards of directors to ensure investors can retain control over key personnel decisions; and
- ensure investors are not required, as a condition of allowing an investment to proceed, to transfer technology, purchase particular domestic goods or services, export a certain percentage of production, or certain other performance requirements.
Like Cross-Border Trade in Services, we are seeking to schedule country-specific exceptions to these obligations on a negative list basis (see explanation above).
Other key elements that we seek in investment chapters include:
- providing certainty that transfers relating to New Zealand investments in the Pacific Alliance (like profits or dividends) can be made freely and without delay, subject to certain exceptions (in particular, the Government’s right to respond to a balance of payments crises); and
- protections for investors from government actions that are grossly unfair or unjust, including expropriation of assets without compensation.
Limitations on accessing the right type of business visas in a timely way are one of the issues most frequently raised by New Zealand business when we ask for feedback on trade barriers. New Zealand is therefore seeking a Chapter on temporary entry for business persons in the Pacific Alliance negotiations that would facilitate and streamline the movement of business people to enable exporters and investors to be able to take advantage of the opportunities created by the FTA. Our approach includes seeking provisions on the timeframe for processing visa applications, a requirement that visa fees be reasonable, and ensuring business people have access to the information they need to submit visa applications. We also seek commitments on access for particular categories of business people, including business visitors, installers and servicers, intra-corporate transferees and independent professionals.
These provisions apply to temporary entry and stay and not to longer-term migration or access to the New Zealand employment market. Our approach ensures that the Government’s right to regulate New Zealand’s labour market and apply usual immigration criteria for entry are preserved.
New Zealand does not seek individual chapters on these issues in trade agreement negotiations. Instead we consider these issues can be adequately reflected in the above services and investment chapters, with references to additional World Trade Organization agreements where appropriate (e.g. the Financial Services and Telecommunications annexes under the General Agreement on Trade in Services, the Understanding on Financial Services, and Basic Telecommunications Reference Paper).
New Zealand has, however, agreed sector-specific chapters on a case-by-case basis. Recent examples include outcomes in CPTPP and the ASEAN-Australia-New Zealand Free Trade Agreement. In considering requests to include these issues, New Zealand seeks to ensure any obligations reflect existing trade agreement obligations as much as possible, are consistent with New Zealand’s existing regulation of these sectors, that are flexible to enable future sector regulation (while prohibiting certain measures, such as discriminatory regulation), and include important exceptions for key issues such as maritime cabotage and prudential regulation of the financial sector.
New Zealand will seek outcomes across the agreement on digital economy issues that support the growth and development of digital trade and its contribution to economic growth. Outcomes should facilitate online business and help exporters realise new trade opportunities while ensuring governments can continue to regulate in the public interest, including by retaining necessary public policy safeguards to address issues such as consumer protection and the protection of personal information in the digital environment.
Key provisions we support including in a Chapter would:
- ensure the technical and legal foundations are in place to allow business and consumers to connect and transact online, including a prohibition on charging customs duties on electronic transmissions;
- allow for the transfer of data between countries to support business needs, while ensuring privacy and other public policy priorities can be regulated for;
- support the efficient operation of cloud computing services across borders, subject to public policy exceptions;
- establish a minimum standard of privacy and consumer rights for New Zealanders;
- provide for on-going cooperation on e-commerce policy; and
- include supporting definitions, exceptions and other scope provisions.
New Zealand is seeking government procurement commitments from Pacific Alliance countries that guarantee the right of New Zealand businesses to bid for government contracts in the same way providers from Chile, Colombia, Mexico, and Peru can already do in New Zealand.
We are giving active consideration to how we can support small- and medium-sized enterprises accessing the new opportunities opened up by a Chapter.
Key provisions we are seeking in support of this include:
- a commitment to treat New Zealanders like local suppliers or those from other countries for covered contracts (covered contracts will be determined by country-specific lists of covered entities, goods and services, and applicable exceptions for sensitive procurement);
- a prohibition against offsets (conditions or undertakings to develop the local economy as a condition for award of contract);
- transparency of individual contract opportunities, tender notices and related documentation, publishing decisions and providing general information on procurement policies);
- challenge mechanisms for suppliers; and
- mechanisms that support on-going cooperation on government procurement policy.
We are seeking outcomes with the Pacific Alliance that reflect New Zealand’s modern and efficient intellectual property system and our obligations under existing World Trade Organization and international intellectual property treaties.
Specific proposals will reflect current domestic policies and legislative settings, taking into account the need to retain appropriate flexibility to ensure these settings remain, over time, appropriately calibrated for a small net importer of intellectual property seeking to incentivise innovation and creativity.
New Zealand will also look for opportunities to support transparency and due process in the protection and enforcement of intellectual property so as to minimise compliance costs for business and exporters.
New Zealand recognises that anti-competitive business conduct and misleading or deceptive conduct have the potential to distort markets and undermine the benefits of trade liberalisation.
For these reasons, New Zealand is seeking outcomes in the free trade agreement that would proscribe anti-competitive conduct, support policies that promote competition, and enable cooperation on related matters.
This includes provisions to ensure Parties have competition law regimes that are transparent and non-discriminatory, that provide for certain exemptions or exclusions based on public policy or interest grounds, and are enforced by a responsible authority or authorities.
This would also include provisions that set out standards for enforcement of competition law, including regarding the rights to presenting evidence, the right to review, and for confidentiality of information obtained in the course of investigations. Provisions setting out opportunities for cooperation, as well as technical cooperation, are also expected to be included.
The Chapter should also include provisions that would set consumer protection standards, establish expectations for transparency in competition law (including between Parties) and expectations for consultations where issues arise between the Parties.
New Zealand is not seeking specific rules on state-owned enterprises (SOEs) in this agreement, but has considered proposals put forward by other countries in past negotiations where these reflect principles that underpin New Zealand’s State-Owned Enterprises Act, and do not limited the Government’s ability to create new entities and empower SOEs to pursue legitimate public policy objectives.
New Zealanders place a high value on protecting the natural environment and are increasingly concerned that growing international environmental risks should be addressed through international agreements, including FTAs. The Government’s progressive and inclusive Trade for All agenda reflects these values and New Zealand is seeking to give effect to them in the Environment Chapter in the FTA in four ways:
- by recognising the right of each country to establish its own levels of environmental protection and to regulate accordingly;
- through commitments that the Parties undertake to effectively enforce their environmental laws; commit to not weakening laws in order to secure a trade or investment advantage; and to refrain from using environmental measures for trade protectionism;
- through specific undertakings (including cooperation) on climate change, marine fisheries, biodiversity, conservation, circular economy, environmental goods and services, responsible business conduct, and multilateral environmental agreements; and
- through mechanisms that facilitate future cooperation, dialogue and provide a forum for Parties to resolve issues that may arise in the implementation of these commitments.
This approach aims to establish a framework for New Zealand and the Pacific Alliance countries to undertake cooperation activities that support objectives for sustainable development, including high levels of environmental protection, robust environmental governance, and mutually supportive trade and environmental policies.
New Zealanders recognise that trade is the product of labour, and therefore that trade agreements should take steps to promote decent work and protect labour rights.
This position is reflected in the principles of Trade for All, which mandates trade policy to maximise opportunities and minimise risks associated with global issues, including labour rights, in our trade agreements.
New Zealand is seeking a Labour Chapter in the agreement that would provide an opportunity to give effect to this focus in various ways, including:
- recognising that labour standards should not be used for protectionist trade purposes, and that they should not be weakened or reduced in order to afford trade or investment advantage;
- a commitment to effectively enforce labour laws in a manner affecting trade or investment between New Zealand and the Pacific Alliance;
- requiring Parties to adopt in their laws the four Fundamental Principles of the International Labour Organization Declaration (freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced or compulsory labour; the effective abolition of child labour; and the elimination of discrimination in respect of employment and occupation);
- committing Parties to adopt and maintain laws which govern acceptable conditions of work with respect to minimum wages, hours of work, and health and safety;
- promoting public awareness of labour laws; and
- establishing mechanisms that facilitate future cooperation, dialogue and provide a forum for countries to resolve issues that may arise in the implementation of these commitments.
In addition, and like a number of other chapters, a Labour Chapter should set out areas for prospective cooperation between the free trade agreement Parties on trade and labour issues, as well as principles to underpin cooperation.
New Zealand supports including a Trade and Gender Chapter in a free trade agreement with the Pacific Alliance, reflecting the priority the Government is attaching to gender equality issues as part of the Trade for All agenda.
The central focus of the chapter should be on growing women’s involvement in trade and investment, with a view to sharing the benefits of trade more broadly.
In this way, the Chapter should acknowledge the importance of incorporating a gender perspective into economic and trade policy issues to ensure that economic growth can benefit everyone, and draw connections with other international agreements focused on gender equality, for instance the United Nations Convention on the Elimination of All Forms of Discrimination Against Women.
The Chapter should also establish a framework for New Zealand and the Pacific Alliance countries to undertake joint cooperation activities on a broad range of issues related to gender and trade, such as capacity building, education, business development services, women’s trade missions, and sharing methods and procedures for gender-focused data collection and analysis.
This cooperation would likely be supported by an oversight mechanism that would help facilitate joint activities undertaken under the Chapter.
New Zealand supports including a Good Regulatory Practices Chapter in the agreement.
This cross-cutting Chapter should recognise the importance of good regulatory practice and regulatory cooperation to facilitate trade and investment, while fully recognising the right of governments to regulate to achieve public policy objectives. The Chapter should focus on the domestic implementation of key principles of good regulatory practice but allow for different approaches to reflect differences in the Parties’ respective institutional, legal, social, and cultural settings.
Implementation would also need to be consistent with domestic laws and regulations. Key principles would include recognising the importance of regulatory impact analysis, domestic interagency consultation and coordination, making information on new measures publicly available and regular reviews of existing measures.
The Chapter could also enable New Zealand and the Alliance to undertake cooperation activities with a view to strengthening cooperation between regulatory authorities, exchanging information, and furthering dialogue and training.
Where these activities are agreed, an efficient mechanism should be included to coordinate this work and engage with domestic agencies.
New Zealand supports the inclusion of a Cooperation Chapter in the agreement that would establish a platform for future cooperation between New Zealand and the Pacific Alliance on a broad range of issues, with a view to enhancing the implementation of the agreement and promoting trade and investment.
Areas of cooperation could include a wide range of trade and economic-related issues of interest to our countries, such as in agriculture, services, innovation, science, and technology.
Activities could include workshops, seminars, conferences, technical cooperation, sharing of best practices, exchanging data, and organising business events and trade fairs.
In this context, New Zealand is also interested to incorporate cooperation on domestic regional economic development, which reflects the role that international trade plays in supporting domestic regional economies by strengthening productivity and sustainability, as well as addressing inequalities within and across regions.
Ensuring that trade and trade agreements are promoted domestically is therefore an important part of sharing the benefits of trade with a broad cross-section of society.
Promoting trade agreements to small- and medium-sized enterprises is similarly an important driver of their internationalisation.
In this way, New Zealand is interested to share experiences and collaborate with Pacific Alliance countries on domestic trade promotion initiatives and establish a framework for future cooperation in this area as ideas and policies are developed into the future.
Maximising the opportunities and minimising the risks of small- and medium-sized enterprises' participation in international markets is one of the key principles underpinning the Government’s Trade for All agenda. New Zealand is therefore seeking an SME Chapter that supports SMEs in taking advantage of the opportunities presented by the Agreement. This would sit alongside specific SME-focused outcomes in other areas of the agreement.
A central element of this Chapter would be the provision of online information designed for SMEs about the agreement and other useful information. The Chapter would also provide a platform for New Zealand and the Alliance to undertake cooperation activities involving SMEs, including capacity building and education. An oversight mechanism would support those cooperation activities.
Trade and productive investment are central to Māori economic development and prosperity, and exporters benefit from the market access and opportunities trade agreements open up. In line with the Government’s Trade for All agenda and the importance of ensuring trade agreements are inclusive of a wide variety of New Zealanders’ interests, New Zealand is seeking to advance a framework for cooperation on indigenous issues in the free trade agreement.
The purpose of cooperation activities could include leveraging and expanding the opportunities for indigenous peoples that are presented by trade and investment, seeking to address trade barriers for indigenous peoples, and promoting cultural and people-to-people links.
Acknowledging that there are a number of successful activities already being undertaken between New Zealand and Pacific Alliance countries, as well as directly between indigenous communities, areas of interest could include developing trade and business relations, indigenous culture and language revitalisation, education and training, traditional knowledge.
These could be carried out through business and cultural missions, the exchange of experiences, and capacity building. New Zealand has positive experience in this area through our economic cooperation agreement with Chinese Taipei (external link), which includes a framework for indigenous cooperation.
Additionally, all New Zealand FTAs since 2001 include an exception that preserves the pre-eminence of the Treaty of Waitangi in New Zealand. This will be a central element of a New Zealand-Pacific Alliance Free Trade Agreement also.
The free trade agreement will need to include a variety of chapters that cover the legal functioning of the treaty, including:
- definitions that will apply across the free trade agreement;
- legal provisions that establish the free trade area and set out the relationship between the free trade agreement and other international treaties;
- a transparency and anti-corruption Chapter that includes provisions requiring the advance publication of laws and regulations, along with requirements to ensure people are informed about them; rules that promote fair administrative proceedings including fair review and appeal rights and processes; and specific anti-corruption obligations targeting corruption that affects trade and investment;
- establish a ‘Free Trade Commission’ to oversee the operation of the free trade agreement;
- establishes a consultation and dispute settlement mechanism to resolve disputes under the agreement that draws on international best practice, including World Trade Organization Dispute Settlement Understanding;
- an exceptions chapter that sets out a wide range of agreement-wide exceptions including in respect to: measures necessary to protect human, animal or plant life or health; national security; taxation; balance of payments; New Zealand’s Treaty of Waitangi exception that preserves the pre-eminence of Treaty in New Zealand and is a central element of all New Zealand free trade agreements since 2001; and
- rules that set out how the free trade agreement will enter into force, how amendments can be made, and reaffirming countries can withdraw from the treaty in the future.
In addition, the Agreement will include a Preamble that sets out key goals and policy statements that the Parties wish to record.
The existing trade agreement between the Pacific Alliance countries – the Additional Protocol to the Pacific Alliance Framework Agreement – already covers a number of these issues.
Resources: English translation of the Pacific Alliance’s internal trade agreement [DOCX, 456 KB].
If you have any other questions about negotiations, contact us at: