A cow photographed in New Zealand. Agriculture plays a large role in New Zealand’s economy, particularly in exports.
David Clapp | Stone | Getty Images
New Zealand’s prime minister told CNBC that the South Pacific island nation needs to look beyond its own backyard for trade opportunities as it signs an economic partnership with the United Arab Emirates (UAE). .
The free trade agreement, officially known as the Comprehensive Economic Partnership Agreement (CEPA), was seen by Prime Minister Christopher Luxon as an opportunity to expand bilateral trade between the two countries and make the UAE one of the largest markets in the Middle East. are.
“We have a long-standing relationship spanning more than 40 years of diplomatic recognition, and now is an opportunity for us to deepen and expand our economic ties,” Luxon told CNBC on Monday.
“That is why the signing of CEPA and bilateral investment agreements is so important. In fact, these are two small developed countries in the world, and they actually have a lot in common.
We have a lot of common values, so we want to work together to build that relationship. ”
The New Zealand government says key exports to the UAE include dairy products, industrial products, meat, horticultural products and travel services. The agreement is due to come into force later this year and comes as the government aims to double exports in 10 years. The report said CEPA would give 99 per cent of New Zealand product exporters duty-free access to the UAE market.
“This includes all New Zealand dairy, red meat, horticulture and industrial products immediately after the agreement comes into force,” he said.
Luxon, leader of the centre-right New Zealand National Party, which has been in power since late 2023, told CNBC’s Dan Murphy in Abu Dhabi on Monday: “A quarter of New Zealand’s jobs are heavily tied to trade.”
“If you look at New Zealand companies that export to the world, they are able to pay their workers.
They often offer 7% higher salaries and wages and are highly productive companies. The message to people at home is that we understand that we are a trading nation. “We don’t get rich just by selling things to each other in the South Pacific or within New Zealand,” he said.
“We really need to bring great products and services out into the world that are in great demand, and we need to make sure we open up new markets like the Middle East to actually get those products. By doing so, we bring in more funds. And of course that’s how we can enjoy better public services such as health care and education,” Luxon added.
New Zealand’s economy needs a boost after shrinking last year and entering recession territory in the third quarter. Data released in December showed economic growth contracted by 1% in the July-September period.
This follows a 1.1% contraction in the previous quarter. Two consecutive quarters of negative growth are widely considered a technical recession.
WELLINGTON, NEW ZEALAND – NOVEMBER 3: Prime Minister-elect and National Party leader Christopher Luxon speaks during a media stand-up in Parliament on November 3, 2023 in Wellington, New Zealand. Special votes cast overseas and by post were certified on Friday, finalizing the results of New Zealand’s general election. Labor was defeated by Christopher Luxon’s National Party, which received the most votes. However, National will need support from both ACT and NZ First if it is to form the next coalition government. (Photo by Hagen Hopkins/Getty Images)
Hagen Hopkins Getty Images News | Getty Images
Mr Luxon said there was no doubt that the past three years had been a “very difficult period” for the country, but that inflation had been contained at 2.2% in October and interest rates had fallen. He said he is doing so. The country’s central bank warned of further easing at its next meeting on February 19th.
“Our business confidence is at its highest level in 10 years, and our consumer confidence is at its highest level in three years.Farmer confidence is at its highest since 2017, and we are working in an environment where people can work with peace of mind. “They know they have a better future ahead of them,” he added.
“Now we have to pivot and really drive growth and that’s what these stronger international trade links are, while also encouraging inbound investment into New Zealand.”
Donald Trump’s return to power in the United States and the possibility that the next president will impose tariffs on exports to the United States (10% or 20% on all goods imported into the United States), as has been widely suggested. We asked them what they thought about the possible imposition of universal tariffs. (U.S.), Luxon said he was in “wait-and-see” mode.
“We’re going to do well no matter which administration the American people choose, and they
They chose Donald Trump and the Republican administration. And we are confident that we can work with them very constructively. “We’ll have to wait and see how or what tariff policy actually develops,” he said.
