Global Economic and Trade Update for New Zealand Businesses - 4 June 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

  • The Ministry for Primary Industries (MPI) has issued a media release(external link) following the detection of the bacterium Salmonella enteritidis in an Auckland poultry farm that supplies hatching eggs and day-old chicks to the broiler (meat) and layer (table eggs) industry. Follow up tracing and testing has found the bacterium at two layer farms that supply the domestic market. These farms do not export table eggs. There is no evidence that contaminated table eggs have been exported. The layer farms that have tested positive do not export, and measures have been implemented to prevent potentially contaminated eggs entering commerce in New Zealand.

Global & Multilateral Updates

  • Members of the Comprehensive and Progressivee Agreement for Trans-Pacific Partnership (CPTPP), including New Zealand, have agreed to commence the accession process towards the UK becoming a member of the Agreement. An accession working group has been set up to examine how the UK will comply with the existing CPTPP rules and will also negotiate the UK’s market access commitments. The Minister for Trade and Export Growth has tweeted(external link) his thanks to all who participated in the recent consultation process on expansion of CPTPP, and a summary of submissions will be finalised shortly.  CPTPP economies are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Viet Nam. Together they account for 13.3% of global GDP – worth a total of US$10.6 trillion.
  • The Organisation for Economic Cooperation and Development (OECD) Secretary-General Angel Gurria chaired his final Council meeting on 26 May, stepping down after 15 years at the helm of the world’s leading economic and policy forum. New Secretary-General Mathias Cormann (an Australian) started on 1 June.

Regional Updates

Australia and the Pacific

  • On 20 May, Australia and Canada notified the World Trade Organisation (WTO) that they had reached a mutually agreed solution in the Canada – Wine WTO case (DS537(external link)). The Canada – Wine case (to which New Zealand was a third party) concerned claims by Australia that a number of Canada’s federal and provisional laws governing the sale of wine were inconsistent with WTO rules.  As Canada and Australia had previously resolved other aspects of the case with respect to measures in the Canadian provinces of British Columbia, Nova Scotia and Ontario, the agreement on remaining claims with respect to the Quebec provincial measures on the sale of wine means that the dispute is now resolved.

Asia

  • China’s overhauled cosmetics regulations came into force on 1 May 2021. In a long awaited move, China has removed the animal testing requirement on imported cosmetics. There is still a hurdle for New Zealand cosmetics exports however, as only cosmetics with a Good Manufacturing Practice (GMP) certificate issued by a government regulator can be exempt from animal testing. In New Zealand, GMP are issued by industry body Cosmetics New Zealand. Some countries with a similar non-government approach to GMP certification have established new China-export specific mechanisms to issue GMP for cosmetics (e.g. UK, France). Officials are exploring how New Zealand can meet the requirement.  
  • On 4 June, the Minister for Trade and Export Growth Hon Damien O’Connor will lead(external link) a ‘virtual’ trade mission to Japan, one of New Zealand’s largest trading partners. Business leaders from New Zealand’s premium food and beverage, health technology, consumer tech, and renewable energy sectors will also be joining him. Delegates from both countries will explore opportunities to work more closely with each other through targeted discussions, market intelligence updates and key note addresses.
  • Viet Nam’s largest COVID-19 outbreak continues to spread, with new and more transmissible variants identified in multiple provinces nation-wide. With new cases in all previous outbreak areas and a steep increase in cases in the two industrial provinces north of Ha Noi - Bac Giang and Bac Ninh, local governments in Ha Noi and the two provinces have moved swiftly to put in place significant additional restrictions. Ha Noi’s restrictions fall just short of a full lockdown. Bac Giang and Bac Ninh have instituted full lockdowns with a night time curfew.
  • On 28 May, Malaysia’s Prime Minister Muhyiddin Yassin announced that the country will come under heightened lockdown for at least two weeks starting 1 June. The announcement comes two weeks after a lighter lockdown was imposed nationwide. It follows steadily escalating COVID-19 cases and deaths, which are putting continued stress on the country’s healthcare system. Broadly similar to the restrictions imposed at the very beginning of the pandemic, the lockdown means all but designated ‘essential’ categories of business will be required to close.
  • On 29 May, Singapore Finance Minister Lawrence Wong announced a S$800 million support package that included wage subsidies for businesses and worker impacted by the phase 2 COVID restrictions (in the range of 30–50% salary support depending on the degree of impact faced by the business). Wong stressed that this package will not draw on fiscal reserves, with a message that Singapore will now have to look at other ways to meet COVID-induced costs to the economy (including by making use of the “Singa” infrastructure loan scheme announced in this year’s Budget). The tightened border measures are affecting some sectors of the economy, with a significant net loss of migrant workers (and expats) impacting in particular on construction, transportation and storage, real estate and F&B. Bright spots, in contrast, are: manufacturing; financial services; wholesale and retail trade.

Europe

  • The UK has launched(external link) a 14-week public consultation process in preparation for free-trade agreement negotiations with India. The UK’s International Trade Minister Ranil Jayawardena commented “A trade deal will break down barriers, making it easier for British businesses to sell their wares in India – and secure more investment, better jobs, higher wages, more choice and lower prices here at home.”
  • On 19 May, New Zealand Minister of Commerce and Consumer Affairs Hon David Clark determined that there was insufficient evidence of dumping of imports of frozen potato products from Belgium and the Netherlands, and that the imports were therefore not causing or threatening to cause injury to the domestic industry. This determination resulted in the dumping investigation into those imports being terminated.
  • On 26 May, in a landmark ruling in the Netherlands, the District Court in The Hague ordered Anglo-Dutch oil and gas multinational Royal Dutch Shell (Shell) to cut its CO2 emissions to bring them in line with the Paris Agreement, including reducing its 2019 emissions by 45% net by the end of 2030. The ruling has far-reaching implications and is the first time a Court has compelled a private company to comply with the Paris Agreement. Shell has already stated it will appeal the decision.

Americas

  • On 25 May, Costa Rica formally became the 38th Member of the OECD. It will be the fourth Member country from the Latin America and Caribbean region to join following Mexico, Chile and Colombia.

Market reports released this week

  • The previous global economic and trade update can be found here.

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.

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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