Business Scoop
Network

Gulf states to sign free-trade agreement with NZ

Article – Businesswire

Nov. 3 (BusinessWire) – Gulf states which collectively make up New Zealand’s seventh largest trading partner have agreed to sign a free-trade agreement early next year.

Gulf states to sign free-trade agreement with New Zealand

By Peter Kerr

Nov. 3 (BusinessWire) – Gulf states which collectively make up New Zealand’s seventh largest trading partner have agreed to sign a free-trade agreement early next year.

The agreement with the Gulf Co-operation Council will build on the $1.3 billion of annual New Zealand exports to Bahrain, Oman, Kuwait, Saudi Arabia, the United Arab Emirates and Qatar. Total bilateral trade is worth $3.85 billion.

New Zealand’s major exports to the region are dominated by primary sector products such as dairy, sheep meat, and wood, but there is strong interest in critical services areas such as ICT, education, environmental and professional services. The agreement needs to be translated into Arabic and ratified by the six members countries, and follows six rounds of negotiations which have been running since 2007.

“The agreement with the GCC offers valuable commercial advantages to New Zealand businesses leading to stronger and more diversified presence in both the GCC states and the wider Middle East,” said Trade Minister Tim Groser. “While there has been a real focus on the Asia-Pacific region of late, this FTA will provide a strong platform for export growth into a region that is likely to emerge strongly from the global recession,” he said

Exact details have not yet been confirmed, as officials still need to complete the verification process before they are made public. Saudi Arabia alone if New Zealand’s 15th-largest export market, taking $550 million of product in the 2 months through September, down 25% from a year earlier, according to government figures.

Business NZ spokesman Bruce Goldsworthy said the deal comes at an opportune time for New Zealand’s economic growth.

“Diversity is of great importance in aiding our emergence as a strong, export-led, free trading economy,” Goldsworthy said.

Fonterra said with dairy exports of $686 million to the region in the May year, up from $498 million in 2006/07, the region’s large population of young people represents an “exciting opportunity.” For example, 41% of Saudi Arabia’s population is aged 15 or under.

“Dairy products are very important in delivering protein and calcium,” said Fonterra chairman Sir Henry van der Heyden. “The conclusion of the negotiations represented a significant opportunity for Fonterra in a high-demand region. While the details are yet to be released, dairy trade currently faces tariffs of 5% and we believe the agreement will allow us to become more competitive and to lift sales further.”

Some 40% of Fonterra’s exports now go to countries with which New Zealand has established a free-trade agreement.

(BusinessWire)

Content Sourced from scoop.co.nz
Original url