Weekly Global Economic Round-up - 4 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

  • On 3 February the New Zealand government announced(external link) the dates for the phased reopening of New Zealand's border (Reconnecting New Zealanders). From 11.59pm 27 February fully vaccinated New Zealanders will be able to travel to and from Australia using “home” or “self-isolation”. New Zealanders and some skilled and other worker visa categories travelling to and from the rest of the world can enter from 11.59pm 13 March. Other foreign nationals will be able to enter between mid-April and October depending on visa category and location. To be eligible for self-isolation, travellers must be fully vaccinated, provide proof of a negative pre-departure test (unless exempt), and not be travelling from a country designated as “higher risk” (of which there are currently none). Unvaccinated or higher risk travellers must continue to undertake MIQ. For further updates, visit the Unite Against COVID-19 website here(external link).

Global & Multilateral Updates

  • On Tuesday 25 January, OECD Members agreed(external link) to open accession discussions with the six current applicant countries: Argentina, Brazil, Bulgaria, Croatia, Peru and Romania. This decision is a landmark event in the history of the OECD, which will now potentially increase its Membership from 38 to 44, should all six applicants successfully navigate their way through the accession process. This will have implications for New Zealand and the wider OECD Membership, as well as regions home to prospective Members, such as South East Asia.
  • The OECD’s latest Economic Survey of New Zealand was released on 1 February and analyses the challenges the country faces after having rebounded rapidly from the sharp downturn caused by the COVID-19 pandemic. It discusses the policies needed to ensure stable, sustainable growth and high living standards and takes a special look at the potential benefits of increased digitalisation. The full report and an executive summary can be found here(external link).
  • Following recent discussions in the Ottawa Group Ministerial meetings, Switzerland has launched a statement(external link) entitled ‘Immediate Action to support the multilateral trading system in preparation for a successful MC12 [WTO’s 12th Ministerial Conference]’. The statement calls on members to sustain momentum on the pandemic response, fisheries subsidies, agriculture, and WTO reform negotiations. The statement has a broad range of at least 30 co-sponsors including Australia, Canada, China, the EU, and the UK and will likely launch next week.  The broad range of co-sponsors is a welcome development and sends an important signal on our shared commitment to the WTO ahead of a reconvened MC12.

Regional Updates

Australia and the Pacific

  • The Victorian Government has announced plans to build a rapid antigen test manufacturing and innovation plant in Victoria. The state government has partnered with Lumos Diagnostics, who are already making rapid tests for the Canadian and European markets, and Planet Innovation to establish the facility.  Production of 50 million tests a year is expected to commence in April.  Premier Daniel Andrews said the project would help ensure Victoria had an ongoing supply of tests amid supply chain shortages in addition to creating 70 local new jobs.
  • Tuvalu ratified PACER Plus on 31 January. Tuvalu is the ninth member of PACER Plus and the Agreement will enter into force 60 days after its ratification.

Asia

  • China has increased its close management of COVID-19 in  the cold chain industry following a number of cold chain workers testing positive for COVID-19 (Delta, not Omicron variant). Reports that a person tested positive for COVID-19 after handling international mail indicate that China is continuing to emphasise imported products as a potential vector of the virus. Consequently, the southern cities of Guangzhou and Shenzhen have announced testing requirements for all recipients of international mail. Officials are closely monitoring for any disruptions to air freight and cross-border e-commerce.
  • The number of daily COVID-19 cases across Japan has hit record highs every day over the last week, exceeding 70,000 on 26 January. In response the Government has widened a quasi-state of emergency which now covers 70% of Japan’s prefectures. Restrictions under a quasi-state of emergency are limited and largely focus on restraining restaurant and bar operations.
  • The Japan Business Federation is starting to call for the government to ease its border restrictions arguing that long quarantine period (recently reduced to seven days from 10) and strict measures that go beyond those imposed in other major economies are affecting their operations. The Japan Business Federation represents large businesses in Japan and its membership consists of over 1,400 company representative companies, over 100 nationwide industrial associations, and regional economic organizations for all 47 prefectures in Japan.
  • From 23 January onwards, travellers entering Singapore via a vaccinated travel lane (VTL) are now only required to do (unsupervised) self-administered antigen tests from day 2-7 of their arrival on any day they need to leave their place of residence or accommodation. VTL travellers that test positive on their self-administered tests will be allowed to recover at home. All travellers who are fully vaccinated and have recovered from COVID-19 within the last 90 days will be exempted from all testing and isolation requirements if they can provide documentary proof.
  • Malaysia’s economy experienced a difficult 2021, amid COVID-19 lockdowns, resulting in a -4.5% year-on-year GDP contraction. However, buoyed by strong exports and government spending, the economy is expected to bounce back to 4-7% growth in 2022.
  • Malaysia’s export sector has been critical to it weathering the COVID-19 storm, with total trade exceeding RM 200 billion (NZ $71.6 billion) for the first time in 2021. Malaysia also experienced a 25.7% year-on-year expansion in exports in November 2021. Malaysia is New Zealand’s 11th largest trading partner – and third largest within ASEAN. It remains a key destination for New Zealand exports, particularly dairy goods. Our exports to Malaysia overall were down (-13.5%) for the last 12 months ending September 2021, but the picture was mixed amongst our key exports: trade in dairy lines was down slightly (-5.5%) on the same time last year; cereal preparations were down by a reasonable amount (-19.1%); and meat and offal were down significantly (-60%).
  • Separately, the month-long freeze on all new ticket sales for VTL flights and buses (across the land border to Malaysia) was lifted on 21 January. However, there continues to be a 50% limit on all VTL flights and bus tickets for entry into Singapore. This means Singapore sees approximately 5,000 VTL travellers daily, down from the peak of 10,000 visitors allowed in November last year. The Government has indicated that border measures, including testing regimens and traveller quotas, will continually be adjusted as the global COVID-19 situation evolves.
  • Palau has been Taiwan’s sole travel bubble, but Taiwan has already tightened controls of its ‘travel bubble’ with Palau following a rise in cases there.  After Taiwan on 24 January reported its first two cases imported from Palau, arrivals from Palau must now undergo testing on arrival and quarantine for five days at a central quarantine facility, followed by another test before being released from quarantine.  A further 16 days of self-health management is then required, including three rapid tests and a further PCR test.  The travel bubble was initially launched in April 2021, allowing tightly managed tour groups to visit Palau.  It was suspended in May due to an outbreak in Taiwan, and resumed in August.

Europe

  • Germany’s Scholz-led Federal Government has released its first official annual economic report. The report showed the Government’s ambition to decarbonise the economy and suggested a set of new indicators to complement the traditional focus on GDP growth and related macro-economic trends. Describing GDP growth as a necessary but insufficient condition for sustainable prosperity and equal living conditions, these indicators cover growth, income, and employment; environmental and climate protection; education, research and innovation; social issues, demography and integration; and public finances and equal living conditions.

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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