Global Economic and Trade Update for New Zealand Businesses - 5 November 2021

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Feedback

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

  • On 1 November, the Government announced(external link) that Waikato will move to Alert Level 3, Step 2 on Tuesday 2 November at 11:59pm, to be reviewed on Monday 15 November. Auckland is likely to move to these same settings next Tuesday 9 November at 11:59pm, subject to a review on Monday 8 November. On 2 November, the Government announced(external link) that Upper Northland is at the standard Alert Level 3 (so Steps 1, 2 and 3 do not apply to this region). This will be reviewed on Monday 8 November. The rest of New Zealand remains at Alert Level 2. Guidance under alert level settings can be found here(external link). The Wage Subsidy (external link)will continue to be available under the current settings.
  • On 31 October, Prime Minister Jacinda Ardern and Minister of Climate Change James Shaw announced(external link) New Zealand’s updated Nationally Determined Contribution (NDC) under the Paris Agreement to reduce emissions to 50% below gross 2005 levels by 2030. This NDC update represents New Zealand’s highest possible ambition, which will be met through a combination of domestic action and international cooperation.

Global & Multilateral Updates

  • On November 2, New Zealand ratified the Regional Comprehesive Economic Partnership (RCEP) (press release here(external link)). Alongside Australia, these ratifications resulted in the entry into force thresholds for the agreement being met. RCEP will enter into force on 1 January 2022, between the ten parties to the agreement – Australia, Brunei Darrasalam, Cambodia, China, Japan, Laos, New Zealand, Singapore Thailand, and Viet Nam.

Regional Updates

Australia and the Pacific

  • On 30 October, the Australian Government announced(external link) that, from 11:59pm Sunday 31 October, it will accept quarantine-free travel (QFT) from the North Island, meaning one-way QFT is now open to all of New Zealand.  As with the requirements for QFT with the South Island, travel is possible for anyone, regardless of nationality, who has been in New Zealand or Australia for the past 14 days. This goes beyond Australia’s opening to the rest of the world, which is currently limited to Australian citizens and residents. This is a Federal Government announcement applicable to all of Australia but is subject to agreement by States and Territories to accept QFT into their respective jurisdictions, and any additional health requirements they may impose.
  • On 22 October, Victorian Premier Daniel Andrews announced that, like New South Wales, from 1 November fully vaccinated people arriving in Victoria from overseas will no longer need to quarantine in hotels or at home. Prime Minister Scott Morrison had previously clarified that any State easing of quarantine requirements would apply only to Australians at this stage. The announcement coincided with Victoria easing COVID-19 restrictions as the state vaccination rate nears 80%. Once 90% of people over the age of 16 have received their two doses, expected on 24 November, caps and density restrictions will be removed altogether and masks only mandatory in “high-risk” settings. Following Victoria’s announcement, Prime Minister Morrison signalled plans for Australia to soon ease travel restrictions with Singapore, and Qantas announced it would bring forward the resumption of international flights.
  • In October 2021, New Zealand’s Ministry for Primary Industries (MPI) completed a systems audit of the export pathway of fresh Tahitian limes from Vanuatu to New Zealand and confirmed that all components are now in place and identified issues have been addressed. The pathway has been granted approval for trade based on MPI’s monitoring of future ten consignments. Final approval will be issued once MPI is satisfied with compliance following the tenth consignment. The pathway was suspended in August 2020 following biosecurity breaches found in a limes shipment. This is the result of a significant coordinated effort between MPI, the Ministry of Foreign Affairs and Trade (MFAT),  private sector importers and exporters, and the Vanuatu Ministry of Agriculture, Livestock, Forestry, Fisheries and Biosecurity.

Asia

  • Evergrande — one of China’s largest property developers — is experiencing significant financial difficulties and has missed several debt repayments, raising concerns about potential economic impacts. Although Evergrande has narrowly avoided default, it remains unclear whether it will be able to meet future obligations. Several smaller property developers have also defaulted, indicating financial difficulties in China’s heavily indebted property sector are more widespread. The impacts for New Zealand will depend on how contained the fallout ultimately is within the Chinese economy. We are likely to see a weakening of export demand in sectors such as forestry that provide substantial inputs to China’s construction sector. It is also possible, although less likely, that a slowdown in the construction industry could lead to a wider slowdown in the Chinese economy.
  • The recent high frequency indicators suggest an ongoing economic recovery in India.  The tourism industry is likely to see some reprieve, as the country started granting tourist visas to travellers arriving on chartered flights from 15 October.  This facility will be extended to those arriving on commercial flights from 15 November.  Tourism contributes almost 7% to India's GDP and is also responsible for millions of jobs in the hospitality sector.

Europe

  • On 31 October, the United States and the European Union reached an agreement on trade in steel and aluminium whereby the US agreed not to apply tariffs on a historical-based volume of EU steel and aluminium imports. As part of the agreement the US and EU have also agreed to negotiate a global arrangement to address the carbon intensity and global overcapacity of steel and aluminium.

Market reports released this week

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.
  • The all of government Trade Barriers website(external link) can be used to register any trade barriers experienced or issues exporting to an offshore market. Queries can be sent via the website or through the MFAT Exporter Helpline 0800 824 605. Enquiries will be sent to the government agency best placed to answer.

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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