Regional Comprehensive Economic Partnership (RCEP)
RCEP builds on New Zealand’s already strong relationships in Asia, and will open up more opportunities for New Zealand businesses in these fast growing economies.
- Why it’s a priority for NZ
- What are the potential benefits?
- Timing for negotiations
- How to get involved
There are 16 countries involved in RCEP: the 10 members of ASEAN—Brunei-Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam plus the six countries with which ASEAN has free trade agreements—Australia, China, India, Japan, Korea, and New Zealand. These six countries are known as the ASEAN Free Trade Partners (AFPs).
RCEP countries have a total population of more than 3 billion, a total GDP of around $US23 trillion (2015 IMF figures), and they account for about 27% of global trade (2014 UNCTAD figures).
Collectively, in the year to June 2016 RCEP countries represented 55.4% of New Zealand’s total trade (imports and exports of goods and services; source Statistics NZ), and took 56% of New Zealand’s goods exports and 52.6% of New Zealand’s services exports – a combined value of approximately NZ$39 billion worth of exports.
New Zealand offers what’s in demand in these countries – a trusted food supply, quality education services in English, a safe tourism destination, and expertise in agriculture, engineering, renewable energy and commercial services. New Zealand relies on these markets for manufactured goods such as vehicles, electronics, clothing and affordable tourism.
RCEP has the potential to increase business across the board in New Zealand. It’s a comprehensive agreement, covering trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, e-commerce (digital trade), dispute settlement/legal and institutional issues. The potential benefits of this type of agreement are:
- better market access for New Zealand businesses throughout Asia
- elimination of tariffs for exporters
- more consistent ways for dealing with sanitary and phytosanitary measures, technical barriers to trade, customs procedures, and rules of origin
- more opportunities for New Zealand’s service sector
- improved protection for investors to help more investment between the countries
- deepening economic integration between countries to enable businesses to operate more effectively and efficiently throughout the region
- working to make the region’s “noodle bowl” of rules operate better together (e.g. rules of origin).
New Zealand already has FTAs with some of the countries involved in RCEP, and has concluded TPP negotiations with several others. Existing FTAs will remain in place, and RCEP will help create new FTA relationships where they do not already exist. It may also be an opportunity to improve at the margin on some of our existing agreements.
A summary of the latest round, and previous rounds, of the negotiations can be found here .
The Joint Leaders’ Statement on RCEP issued on 8 September 2016 in Vientiane, Laos instructed officials to further intensify negotiations in a cooperative manner for the swift conclusion of the RCEP negotiations. RCEP Participating Countries (RPCs) are also committed to deliver on an agreement that meets the quality objectives of a modern, comprehensive, high-quality and mutually beneficial agreement as envisioned in the Guiding Principles and Objectives for the RCEP Negotiations (‘Guiding Principles’).
MFAT negotiators are keen to hear from businesses or individuals who are facing barriers to this market. This includes companies that are not exporting now, but plan to enter the market.
Examples of common barriers New Zealand businesses face offshore are:
- high tariffs, eg duties imposed on items at the border that add significantly to the price point in the market
- surcharges and duties required at the border
- sanitary and phytosanitary measures, e.g. restrictions for animal or plant material to be allowed across the border
- technical barriers to trade (regulations or officially endorsed standards, industry standards, conformity assessment requirements e.g. testing), import licensing, customs or difficulty in finding out about relevant local laws and regulations
- restrictions on individuals, eg difficulties with recognising qualifications or obtaining business visas, requirements to obtain local licences
- restrictions on investors, eg requirements to operate in joint ventures with local partners, requirements to employ locals or restrictions on the ability of New Zealanders to be transferred to work in subsidiaries or affiliates, local representation requirements for boards of directors, restrictions on the ability to invest in a new enterprise or invest equity
- financial or business restrictions, eg restrictions on supplying services from New Zealand (including via the internet), difficulties competing with local firms that benefit from government preferences, complex and discriminatory local regulations.
We also want to hear from New Zealand companies that are concerned about the effect of an increase in imports as a result of New Zealand agreeing to eliminate our tariffs.
To give feedback or for more information about the RCEP negotiations, contact us by:
Coordinator, RCEP FTA
Ministry of Foreign Affairs and Trade
Private Bag 18901