INZBC recently made a submission to the NZ Government on the Trade for All Agenda. This is a summary of the submission originally drafted by Esther Guy-Meakin.
The contribution of trade to New Zealand’s economic prosperity is significant. NZ has greatly benefited from a bi-partisan commitment to trade with a diverse range of partners.
INZBC recognises that the social license for trade needs to be refreshed. Trade must benefit everyone and governments should be able to regulate in the public interest. While INZBC supports the inclusion of progressive elements into trade agreements we would also like to emphasise the importance of domestic regulatory settings in ensuring that trade delivers for a broader section of society and the economy.
INZBC supports the government’s efforts to explore ways in which inclusive elements can be included in trade agreements, including with respect to SMEs, the environment, labour, gender equity and Maori.
Trade is important to New Zealand As a trading nation, trade liberalisation and international market access have played a vital role in NZ’s economic prosperity, business growth and lifting the living standards of Kiwis. Trade has also lifted millions of people out of poverty all over the world. Successive NZ governments have pursued and negotiated high quality, comprehensive agreements that have opened doors for NZ businesses. A diverse range of trade agreements is important because the elimination (or reduction) of tariffs and other trade barriers improves the competitiveness of our exports.
It is equally important that trade agreements put in place disciplines around non-tariff barriers (NTBs). NTBs are costly and difficult to address and resolve, and often significantly impact trade. The cornerstone of trade remains the WTO. The rules-based trading system has been of significant value and benefit to NZ. It has provided us with a level playing field, and common set of rules that have allowed NZ to punch above its weight on the world trade stage. We support the government’s efforts to strengthen the WTO.
Similarly, we also support the government’s leadership in pursuing plurilateral regional trade agreements such as the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP).
Despite the numerous benefits of trade, we recognise that the social license and public acceptance of trade policy that we have taken for granted over the past few decades needs to be refreshed. This includes better and more transparent communication and consultation with the public, but it will also require a more deliberate effort to ensure trade is sustainable, socially responsible and more broadly benefits our economy.
However, while we support the inclusion of progressive elements into trade agreements we would also like to emphasise the importance of domestic regulatory settings in ensuring that trade delivers for a broader section of society and the economy. Part of a problematic narrative around trade is that it is responsible for job losses and growing inequality.
Trade is important for the New Zealand-India relationship
Last year NZ exported NZ$679 million worth of goods, and services trade is worth NZ$1.39 billion. The relationship has strong foundations. However, there remains significant untapped opportunity including in trade in goods, services and investment. NZ is well placed to play a positive part of India’s growth story.
INZBC has been a strong advocate for both a bilateral FTA and the RCEP, and we continue to encourage the government to pursue ambitious outcomes in both those processes.
Trade needs to deliver benefits to all parts of society We recognise the importance of ensuring that trade policy safeguards the freedom of countries to protect and promote the values of their societies, and to ensure that these values are not diminished or restricted at the expense of trade liberalisation.
The business community often notes the signals that trade agreements send about the confidence and opportunity in a certain market. The inclusion of progressive and inclusive elements has the potential to have the same signalling effect and set expectations. Many of these issues are already front of mind for responsible and successful businesses as consumers become better informed and more conscious of issues such as environmental impact or responsible employment.
In NZ we benefit from strong legal institutions, legislation and regulation that promote and protect the Treaty of Waitangi, environmental standards, gender equality and high labour standards. NZ businesses also benefit from an enabling regulatory environment. NZ is recognised as number one in the world for ease of doing business indexes. NZ could share our experience and approach, including in future agreements with India.
Below we highlight some important aspects that we recommend being considered for inclusion in trade agreements and policy.
Small and Medium Enterprises (SMEs) In NZ 97% of enterprises are small businesses employing 30% of NZ’s working population producing around 27% of NZ’s GDP. We welcome and support initiatives by government to support small business and welcome provisions in trade agreements that do so.
NTBs also significantly impact small (and big) business as they may be less equipped to overcome costly and often trade prohibitive NTBs. Provisions in trade agreements that go to addressing and disciplining the use of non-tariff measures to protect or restrict trade are essential. Initiatives such as the “Trade Barriers Portal” are invaluable in supporting SMEs to overcome NTBs.
Strong disciplines on NTBs with trading partners such as India are paramount for bigger business and SMEs. NZ businesses in forestry or food and beverage, face a number of NTBs including challenging fumigation requirements for forestry products, opaque labeling requirements or red tape around securing import licenses.
Gender and trade Enabling greater female participation in the economy, greater representation and opportunity at all levels of the public and private sectors, and gender equity is not only an issue of fairness and moral ethics it is also good economics. The World Bank estimates that India could boost its GDP growth by 1.5 percentage points to 9% a year if 50% of women could join the work force. As a tool for economic growth, it therefore makes sense that trade agreements include provisions on gender and trade.
Environment Safeguarding the environment for future generations is essential, and trade should support this aspiration. Including environmental considerations in trade agreements have a number of potential benefits, such as promoting mutual support of trade and environment policies, strengthening enforcement of environmental laws and raising levels of environmental standards, establishing or reinforcing environmental cooperation, and enhancing public participation. We recommend that provisions in respect of the environment continue, as they were in CPTPP, to be legally binding.
Labour High labour standards are vital to lifting productivity and ensuring quality. Consumers have long demanded assurance that their products are produced in work environments with strong labour standards. We recommend that provisions in respect of labour continue, as they were in CPTPP, to be legally binding.
With a trade partner such as India, there are opportunities for collaboration in supporting greater health and safety standards and enforcement in the work place. NZ has robust health and safety frameworks in place and India may benefit from learning about the NZ experience and approach.
Indigenous issues Māori and the Treaty of Waitangi are an important part of NZ and the government’s obligations. Trade agreements should be consistent with the principles of the Treaty of Waitangi, and consultation open and transparent.
Indigenous peoples around the world make significant and important contributions to culture, heritage, innovation and business of their societies. The Maori economy is estimated at $50billion. India also has a significant indigenous population comprising 705 ethnic groups (Scheduled Tribes), making up some 104 million or 8.6% of the population.
Greater cooperation on indigenous issues with other countries, including India, is an opportunity for Māori to share their story, and support the protection of other indigenous groups.