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New Zealand; Taiwan: Free Trade Agreement Signed

(July 18, 2013) On July 10, 2013, the Republic of China (on Taiwan, ROC) and New Zealand concluded the Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation (ANZTEC). It is Taiwan’s first free trade pact with a developed economy and, according to the ROC Ministry of Foreign Affairs (MOFA), represents a major forward in Taiwan’s efforts to participate in regional economic integration. (Taiwan, New Zealand Ink ANZTEC Agreement, TAIWAN TODAY (July 10, 2013).)

New Zealand is the only country in the world to have forged free trade agreements (FTA) with China, Hong Kong, and Taiwan, and it is the first Member State of the Organisation for Economic Co-operation and Development to sign an FTA with Taiwan, which is its 12th largest trading partner. (Fran O’Sullivan, The Taiwan FTA, KIWIBLOG (July 13, 2013, 1:00 pm); Malcolm Cook, The ‘Win-Win’ New Zealand-Taiwan FTA, THE INTERPRETER (July 15, 2013).)

Aside from cementing bilateral trade ties and promoting industrial collaboration between the two parties, MOFA Minister David Y.L. Lin noted that the ANZTEC “will also encourage more nations to conclude similar agreements with Taiwan, and help fast-track the country’s participation in regional trade blocs such as the Trans-Pacific Partnership and Regional Comprehensive Economic Partnership.” (Taiwan, New Zealand Ink ANZTEC Agreement, supra.) Stephen Payton, Director of the New Zealand Commerce and Industry Office in Taipei, signed the Agreement on New Zealand’s behalf and described the event as a major achievement for both New Zealand and Taiwan. He “strongly [urged] businesses in both markets to take advantage of opportunities” that would be created by the pact. (Id.)

In addition to investment, the 25 chapters of the ANZTEC cover such areas as air transport services, competition, customs cooperation, dispute settlement, e-commerce, government procurement, intellectual property, labor, and technical trade barriers. (Id.; ANZTEC [in English], New Zealand Commerce and Industry Office in Taipei website (last visited July 15, 2013); ANZTEC [in Chinese], ROC Ministry of Economic Affairs website (last visited July 15, 2013).) They also include “innovative provisions” that detail collaboration on film and television production and indigenous issues. (Taiwan, New Zealand Ink ANZTEC Agreement, supra.)

There are eight Annexes to the ANZTEC, the first of which concerns the tariff schedules of each party. The Agreement provides for immediate elimination of tariffs on 95.2% of products imported to Taiwan from New Zealand; the remainder, except for rice, will be reduced to zero over a 12-year period. On the New Zealand side, tariffs on all Taiwan imports will be removed as soon as the Agreement enters into force, except for those on 29 industrial goods; those tariff rates will become zero over a four-year period. (Id.)

In addition to the elimination of tariffs and collaboration in the arts and on indigenous issues, other highlights of the ANZTEC are:

  • greater market access for services, committing both sides to a broader scope of access than the commitments each side has made under the current WTO framework, e.g., further liberalization by New Zealand of its engineering, environmental, landscaping, research and development, and urban planning services;
  • more government procurement opportunities for Taiwan, widening a heretofore limited NZ government procurement market for Taiwan suppliers because New Zealand is not currently a party to the WTO Government Procurement Agreement;
  • more flexible air transport services through the incorporation of an “open skies” air transport agreement to facilitate both sides’ airline operations; and
  • higher environmental awareness, through ANZTEC’s adoption of international concepts that include adherence to environmental policies in trade, with both governments defining the scope of “environmental goods” to promote their trade and use, and inclusion in an Annex of an environmental goods list. (Press Release, Ministry of Economic Affairs, MOEA Affirms the Signing of ANZTEC (Agreement Between New Zealand and Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu on Economic Cooperation) (July 10, 2013).)

Taiwan’s main exports include electronic components and parts, machinery, and petrochemicals; New Zealand’s are mainly dairy products, fruit, and lamb. According to the ROC Ministry of Economic Affairs, the ANZTEC will increase Taiwan’s gross domestic product by 0.076% a year (an amount of about US$303 million), create 6,250 jobs, and increase the annual output of the domestic manufacturing and services industries by NT$30 billion and NT$9 billion, respectively. ROC government statistics indicate that in 2012 trade between Taiwan and Zealand reached a value of US$1.21 billion. (Taiwan, New Zealand Ink ANZTEC Agreement, supra.)

Minister of Economic Affairs Chang Chia-juch was quoted as saying that Taiwan is fast-tracking legislative review of the ANZTEC, which will enter into force after each side’s completion of their respective procedures. (Id.) Taiwan has also been conducting negotiations on free trade agreements with India and Singapore. (FTA Between India and Taiwan –Negotiations Underway, TAX NEWS SERVICE (July 11, 2013), International Bureau of Fiscal Documentation online database; Taiwan-Singapore FTA Talks to Yield Results Soon: Minister, WANT CHINA TIMES (Apr. 12, 2013).)