Modernising our trading relationships
RCEP includes chapters in a number of areas that are new for some RCEP countries and will modernise New Zealand’s trading relationships with these countries in line with our best practice from recent FTAs.
Electronic-commerce (e-commerce) is critical to international trade in goods and services. This includes cross-border goods trade conducted using e-commerce platforms, traditional goods trade being facilitated through increased digitalisation of processes, services delivered digitally, as well as trade in products delivered through the internet, such as e-books.
RCEP markets present a huge opportunity for New Zealand businesses. China has the most digital consumers of any market in the world and ASEAN is a growing market in the digital space. The impact of the COVID-19 pandemic has also increased demand for digital services and products and highlighted the value in agreeing rules on e-commerce.
RCEP’s Electronic Commerce chapter will allow businesses and consumers to transact online with confidence; protect the privacy and rights of consumers; and establish a framework for discussing fast-changing and emerging issues. The chapter will introduce specific rules on e-commerce for the first time in a trade agreement with South Korea, and expand existing rules in ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) and the New Zealand-China FTA. The inclusion of these e-commerce obligations will modernise the trading relationship with our RCEP partners, particularly those not party to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Almost 99% of New Zealand’s businesses and traders are small and medium-sized Enterprises (SMEs), with SMEs defined as having less than 50 employees. Despite a high number of SME exporters in absolute terms, the participation rate of SMEs as direct exporters is relatively low. In 2018, less than a quarter of New Zealand SMEs export. This compares to one third of large firms.
The Small and Medium Enterprises chapter requires RCEP Parties to share complete information about RCEP online and include links to other information of relevance to SMEs doing business within the Parties. These provisions align with the practice in New Zealand of ensuring businesses have good access to information, so they can make the best decisions to manage and grow their business.
Robust and efficient competition policies, laws and regulations, maintained and enforced in a fair and transparent way, help provide for a stable and predictable regulatory environment, encouraging increased trade and investment.
RCEP’s Competition chapter requires RCEP Parties to have in place competition laws and maintain independent competent authorities to enforce laws which prohibit anti-competitive conduct and promote consumer welfare. This will be an important step forward in the region. RCEP will ensure that those competition laws are transparent and follow due process in its enforcement. The chapter also establishes systems to facilitate cooperation between the Parties’ competition authorities.
Government procurement is the acquisition of goods and services, including construction services, by government entities from third parties to fulfil their public functions. New Zealand’s ambition is that a modern and comprehensive FTA should include commitments on government procurement.
RCEP’s Government Procurement chapter promotes more transparent procurement processes. Cooperation provisions will allow for a better understanding of RCEP Parties’ respective government procurement laws, regulations and procedures; and a mechanism to facilitate consultation and exchange of information on such matters.
RCEP represents a modest step forward through securing improved government procurement commitments with Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines and Thailand. It is significant as the first time that major ASEAN economies such as Indonesia, Thailand and Philippines will take meaningful Government Procurement commitments. This establishes a foundation for us to expand on in future.
The Economic and Technical Cooperation (ETC) chapter provides an opportunity to better coordinate New Zealand’s economic and technical cooperation activities across the RCEP region, without committing New Zealand to any particular activity.
This chapter enhances New Zealand’s reputation as a trusted, valued and fair trading partner, by recognising the constraints faced by developing and least developed ASEAN Member States.