What is the difference between the CEP and an FTA?

A Closer Economic Partnership or CEP is another name for a free trade agreement. The New Zealand Singapore CEP is the bilateral free trade agreement between the two countries.

What is an ‘upgrade’?

An upgrade of a FTA occurs when countries renegotiate a free trade agreement to make improvements to it. In the case of the CEP, trade policy has significantly evolved during the past 18 years since CEP was first signed, so it was timely to update it and make changes to the agreement.

When will the new CEP enter into force?

The CEP was signed on May 17 by Minister Damien O’Connor, alongside the launch of the Singapore New Zealand Enhanced Partnership.

New Zealand has since begun undertaking the required domestic legal procedures to ratify the agreement. This will include undergoing parliamentary treaty examination and the passage of required regulations in order to meet our updated obligations under the agreement. 

The separate Mutual Recognition Agreement will enter into force on the first day of the second month following the completion of New Zealand and Singapore’s domestic legal procedures, following the exchange of diplomatic notes. 

What happens to other agreements New Zealand has with Singapore?

The CEP upgrade does not affect any of the other free trade agreements New Zealand has with Singapore. New Zealand currently has three other free trade agreements with Singapore: the ASEAN New Zealand and Australia free trade agreement (AANZFTA), the Trans-Pacific Strategic Economic Partnership (P4), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

To help decide what agreement you should use to export to Singapore, consult:

Does the new CEP affect the Treaty of Waitangi?

The original CEP contains a Treaty of Waitangi exception that explicitly allows the government to adopt any policy it considers necessary to fulfil its obligations to Māori. This has been retained in the upgrade. The Treaty of Waitangi exception is just one of a number of exceptions and reservations found in our free trade agreements which ensure that our government retains its right to regulate in the public interest.

Why can Singaporeans still buy houses in New Zealand?

The exemption for Singapore from the screening of residential land in New Zealand was granted in order to uphold existing commitments in the CEP. In granting Singapore the exemption, we have also agreed that if the current number of Singapore buyers materially increases, we will meet with Singapore to discuss the cause of the increase, and how to address it, if required. 

Is Investor-State Dispute Settlement (ISDS) in the new CEP?

The CEP retains the voluntary ISDS mechanism that was negotiated as part of the original 2000 CEP agreement. However, no case can be brought against New Zealand under the CEP unless we first agree – this means that it is ‘voluntary.’ In the upgrade we have also added more safeguards, like the exemption for tobacco control measures, to the already voluntary ISDS mechanism.

Does CEP include labour and environment provisions?

While neither the original CEP nor the upgrade includes trade and labour and trade and trade and environment provisions, Singapore and New Zealand have other international instruments between them covering trade and labour and environment issues. The P4 agreement has side instruments covering these issues, and the CPTPP agreement also includes labour and environment chapters.  This means that disciplines covering trade and labour and trade and environment already apply to Singapore and New Zealand as a result of these other instruments.

Will the new CEP have an impact on the government’s right to regulate in the area of public health?

The CEP upgrade will not change the Government’s existing ability to regulate for legitimate public policy purposes, including public health objectives.

Is there any new market access in the upgraded CEP?

In addition to the new areas and the overall modernisation of the text of the CEP, the upgrade also improves the market access outcomes in three main areas:

  • an extension to the period of visa-free entry for New Zealand business visitors visiting Singapore from the existing 1 month to a new period of 3 months. When the CEP upgrade is in force, the visa-free access for up to three months will, in effect, be available to all New Zealanders
  • an extension for New Zealanders of the total potential term of stay in Singapore for intra-corporate transferees from the existing five years to a new period of eight years; and
  • two new implementing arrangements on sanitary and phytosanitary measures.

Does the new CEP affect trade in services?

The CEP upgrade does not make any substantive changes to the original Services Chapter text itself with the exception of updates to provisions requiring the Parties to review the commitments in the Chapter. These updates are made to remove references to processes that have already occurred and to update references from the existing CEP’s general review provision (Article 68) to the new review provisions set out in Chapter 15 (Institutional Provisions).

What will the new e-commerce chapter do?

The original CEP did not include an e-commerce chapter. Since 2000, the importance of cross-border e-commerce has increased significantly. This has benefitted both New Zealand export firms and New Zealand consumers who order online. New Zealand trade policy has developed to support this trade. We have included a chapter on e-commerce in the CEP upgrade to modernise the trading relationship with Singapore with three broad and inter-related objectives:

  1. to ensure businesses and consumers can transact online with confidence
  2. to allow businesses to freely transfer data in the course of business; and
  3. to protect the privacy and rights of consumers.

Will any changes to legislation be required?

No changes to primary legislation will be required as a result of the CEP upgrade. This is because most of the obligations in the CEP upgrade are already met by New Zealand’s existing domestic legal and policy regime.

Will any changes to regulations be required?

Two changes to regulations will be required as a result of the CEP uprade. These are:

  • An amendment order under the Tariff Act to implement Article 2.17 that creates an obligation not to apply a customs duty to a good that re-enters New Zealand’s after it has been temporarily exported to another country for repair or alteration.
  • An amendment to the Customs and Excise Regulations 1996 to implement the agreed rules of origin and product specific rules for goods imported from Singapore.

Has economic modelling been done for the new CEP?

No economic modelling has been commissioned for the CEP upgrade. This is because New Zealand and Singapore already have full tariff elimination through the original CEP and subsequent trade agreements with Singapore.