Weekly Global Economic Round-up - 25 February 2022

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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 subscribe to this weekly update, you can sign up here(external link) or email us at exports@mfat.net.

Domestic Updates

  • The Upgrade to New Zealand’s Free Trade Agreement (FTA) with China will enter into force on 7 April 2022. Aotearoa New Zealand and China have now ratified the Upgrade Protocol and agreed the Entry into Force date, the final step following the signing of the FTA Upgrade in January 2021.  In terms of goods, the Upgrade will deliver further market access improvements, resulting in tariff-free access for 99 percent of New Zealand’s $4 billion wood and paper trade to China, once fully implemented. Further information can be found in the press release here.(external link) (external link)
  • NZ-China FTA – Tariff Removal for Dairy - Separately, since 1 January 2022, most New Zealand dairy products to China have been entitled to duty-free access for the first time as a result of ongoing implementation of the existing NZ-China FTA. This will directly benefit New Zealand’s dairy exporters, and is expected to result in additional savings of $180 million per annum at current export volumes.
  • The Prime Minister will undertake a visit to the United States in May.(external link) The visit will contribute to the government’s reconnection strategy and will see the Prime Minister undertake engagement on the United States West Coast focused on New Zealand’s high-tech export sectors and connections with US innovation and tech.
  • Foreign Affairs Minister Nanaia Mahuta(external link) departs for Europe this weekend to represent Aotearoa New Zealand at the Indo-Pacific Forum in Paris. She will undertake a bilateral visit to the United Kingdom, and will participate in the United Nations Human Rights Council in Geneva. “This trip is an important step in reconnecting New Zealand to the world, and an opportunity to present our values and interests to key partners as we move forward in a post-COVID world,” Minister Mahuta said. In Paris Minister Mahuta will participate in the Ministerial Forum for Co-operation in the Indo-Pacific, co-hosted by the European Union and France as the current President of the Council of the European Union. Foreign Ministers from all of the 27 European Union member states and a range of countries from the Indo-Pacific region have been invited to participate in the Forum.

Regional Updates

Australia and the Pacific

  • The signing of a land lease between the Sydney Marae Alliance and the Mayor of Cumberland City Council in Sydney on 5 February marked an important milestone in the journey towards the establishment of a Māori Cultural Centre in Australia. The deal between Māori in Australia, a Sydney council and local Aboriginal people will see a first of its kind cultural centre built in the city’s outer suburbs, for expatriates wanting to reconnect with other whānau from home. The initiative will enable the Māori community in Australia to share their tikanga with current and future generations of Māori in Australia and strengthen ties between the indigenous peoples of Aotearoa New Zealand and Australia.
  • One-way quarantine-free travel to New Zealand will be extended to include Nauru, Tuvalu and American Samoa, today(external link). From 11.59 pm 27 February, eligible travellers from Nauru, Tuvalu and American Samoa, will be able to enter New Zealand without entering MIQ or self-isolation on arrival, as air routes become available. This is in recognition that these countries have no COVID-19 community cases.

Asia

  • Strong performance for the last quarter of 2021 raised the Philippines’ annual growth, demonstrating the economy’s potential given less restrictions and better COVID-19 management. There is general optimism for the Philippine economy in 2022, which will likely be buoyed by election spending, increased income and household expenditure, and continued government disbursement to fund infrastructure.

Europe

  • The EU is seeking to reduce its contribution to global deforestation by blocking the sale of certain agricultural commodities if they have been sourced from land deforested after 2020. The proposed law initially targets beef, wood, palm oil, soya, coffee and cocoa and makes no distinction between legal or illegal deforestation.  This new law could enter into force in 2024 or 2025. New Zealand’s most affected sector would be beef, but existing traceability practices should mean it is relatively well-placed to meet the new due diligence requirements.  We are less clear on the implications for exporters of composite products, such as chocolate, which use globally-sourced cocoa in their supply chains. We will be releasing a market intelligence report on this topic soon.
  • New Zealand exporters are facing significant supply chain and logistical challenges when exporting to the UK, particularly for perishable goods. While issues faced are similar to those experienced around the world, they are exacerbated by the impact of Brexit and other UK-specific challenges. These challenges include a shortage of global shipping containers, loss of passenger freight capacity, rising input costs, and increased shipping demand from the boom in online shopping. We have heard reports of extreme delays in transit; for example, containers carrying New Zealand exports to the UK were held up in transit in Singapore for three months, with significant cost implications. These delays are negatively affecting exporters’ contracts and relationships with retailers. We will be releasing a market intelligence report on this topic soon.

Americas

  • US Department of Agriculture is helping to fund a “pop-up” empty container yard at the Port of Oakland in California to support US agricultural exporters overcome supply chain issues, including paying US$125 per container to cover additional logistics costs. The investment could be beneficial for New Zealand exporters to the US, by facilitating improved operations at the port and lowering associated costs. We will be releasing a market intelligence report on this topic soon.

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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