Ministerial Statements — Comprehensive Economic Partnership Agreement—Conclusion of Negotiations with United Arab Emirates
I wish to make a ministerial statement on the Comprehensive Economic Partnership Agreement with the United Arab Emirates (UAE). Firstly, I’d like to welcome my friend and colleague, His Excellency Dr Thani bin Ahmed Al Zeyoudi, the United Arab Emirates Minister of State for Foreign Trade, and his delegation.
Earlier today, we were pleased to announce the successful conclusion of the New Zealand - United Arab Emirates Comprehensive Economic Partnership Agreement, or CEPA, just over four months after we launched the negotiations in Dubai on 7 May this year. This agreement is one of the most ambitious and liberalising of any trade agreement to date. I want to thank Dr Thani and his team for their dedication and professionalism and the pragmatic way our teams have worked together to reach this agreement.
This high-quality trade agreement will grant New Zealand duty-free access for 98.5 percent of our exports to the UAE upon the agreement’s entry into force, rising to 99 percent after three years. This is an exciting development for our farmers, manufacturers, services, and digital exporters and our investors, and supports our Government’s goal of doubling the value of exports in 10 years.
The UAE is a top 20 export market for New Zealand, one of our largest markets in the Middle East. As a vital logistics hub, it serves as a gateway for many of our companies into the wider region. This agreement will enhance our cooperation in areas such as agriculture, sustainable energy, and the aviation and maritime sectors.
Significantly, the CEPA provides major benefits to our agricultural sector, offering new opportunities in a world increasingly marked by protectionism. Beyond tariff elimination, the CEPA includes strong commitments on services, Government procurement, and in investment.
The CEPA’s investment facilitation chapter and a bilateral investment treaty concluded alongside the CEPA will create a framework for investment between our countries, providing investors with confidence that their investments will be treated fairly and equitably by the other party, helping to encourage greater investment flows. This agreement does not include investor-State dispute settlement.
Beyond the numbers, the agreement also includes chapters on intellectual property, sustainable development, labour, sustainable agriculture, climate, and on indigenous trade. We’ve also secured New Zealand’s Treaty of Waitangi exceptions to allow us to continue to meet Treaty obligations.
Why does this matter? Well, we face increasing challenges in the global environment, from food security concerns to climate change and geopolitical tensions. In such times, it’s critical that we act to support the international rules - based trading system and grow our prosperity. Strengthening our international connections through trade is an essential focus for me as Minister and this Government. Trade is a stabilising force that fosters shared benefits and cooperation and can enhance people-to-people linkages. It remains a crucial engine for economic growth, lifting incomes and helping economies to respond to global shocks. Trading nations like New Zealand and the UAE look outwards. We champion global connections and benefit from the free flow of goods, services, capital, and ideas.
The Government is focused on growing the economy and easing the cost of living for New Zealanders. Strengthening global connections is one of the key strategies to achieve this. Trade supports one in four jobs in New Zealand, with export-related jobs paying better wages than those that are not involved with export. Exporting firms are also generally more productive and faster growing than non-exporting firms. That’s why we’re committed to increasing the value of our exports, expanding market access, and breaking down trade barriers. The swift conclusion of this high-quality agreement reflects that commitment. Now that we have done so, I look forward to working towards signature, ensuring that New Zealand and UAE exporters understand how to take full advantage of this agreement.
I wish to extend my sincere thanks again to His Excellency Minister Al Zeyoudi and to the UAE business delegation for their interest in fostering deeper ties with New Zealand businesses. Together, we’ll ensure that this agreement delivers real value for both nations and for the citizens of New Zealand and the UAE. Thank you, Mr Speaker.
Thank you, Mr Speaker. In the absence of Damien O’Connor, it falls to me to comment on behalf of the Labour Party. Can I congratulate the Minister and the Government for concluding this agreement.
I want to say a little about its history. New Zealand got quite close to finalising this agreement in 2008, and then on the Gulf side, there was a request made by the Gulf Cooperation Council for the United Arab Emirates (UAE) to conclude the agreement through that apparatus, and that then became disrupted with events in the region rather than on this side. As a consequence, after the 2008 election, the National Government continued to proceed with other agreements such as the early negotiations or continuation of the negotiations with the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). We then came to Government, knocked off the finishing off of CPTPP, and prioritising other agreements like the European free-trade agreement, which we landed; the UK free-trade agreement, which we landed; the China upgrade; and the ASEAN-Australia - New Zealand Free Trade Agreement upgrade. It’s good now to come back and conclude the agreement with the United Arab Emirates outside of the Gulf cooperation framework.
Trade agreements can’t be relied upon to cure all of the ills in the world. It’s unrealistic to expect that trade agreements will have binding environmental and labour obligations that are so high that they will cure all of the labour and environmental problems in the world, but trade agreements ought to do the lifting that they are able to do in advance of those very worthy goals. I’m pleased to hear that there are both trade and labour and environmental standards in this agreement, including as to objectives for climate change. That is good.
In respect of the investment protocols, can I congratulate the Minister for carrying forward the position in respect of investor-State dispute settlement (ISDS) clauses. The House will be aware that there has been a backlash against those agreements in the world where civil society has not liked the fact that foreign multinationals can sue Governments under ISDS clauses for breaches of trade agreements, and we, when in Government, reached the view that those enforcement mechanisms should be Government to Government, rather than corporates against Government. We thank the Government for carrying that forward in respect of this agreement and for the UAE agreeing to that change of position, which is a change of position for the UAE and I think settles down, or is likely to settle down, societal acceptance of agreements such as these.
The final two points I would make are in respect of overseas investment protocols. New Zealand is well protected in respect of the issues that we can still screen for in respect of inward investment, which includes, under our regime, infrastructure with monopoly characteristics, obviously issues that have security ramifications, rural horticulture, forestry, and residential land.
Lastly, could I pass on my thanks to the UAE Government for the cooperation that they showed during COVID. Only some members will be aware that there were a lot of phone calls made at the time of COVID to try and keep air links between different parts of the world open. None of these routes were profitable. New Zealand, through Air New Zealand, supported some routes. I recall phoning the then trade Minister of the UAE, asking the Emirates to keep their route open to New Zealand, albeit less frequently. Different calls were made to the likes of Singapore, and between work through the ministries in all of these different parts of the world, we actually managed to maintain air connectivity for the rest of the world.
Now, that had both trade benefits, and it enabled returning New Zealanders to get home and people to return to their other countries, albeit with restrictions around managed isolation and quarantine, but it also managed to help feed people in other parts of the world who were reliant on protein and other food from New Zealand, which also helped our exporters, and of course it was heavily subsidised by the Government, although some of the consequences of that for the deficit of the time seem to be more controversial now than they were at the time.
So, with those comments, can I congratulate the Government and congratulate the UAE as well on this day, and I look forward to participating in the consideration of the national interest analysis when it comes before the select committee.
I too rise as the Green Party spokesperson for trade, and, firstly, also to congratulate the Minister for Trade, the Hon Todd McClay, on this Comprehensive Economic Partnership Agreement (CEPA). There are a couple of things I would like to address before, if I may. I have a few questions for the Minister, as well.
The first thing is also to thank the Minister for upholding his commitment to not include the investor-State dispute settlement (ISDS) process, which is something that he has committed to in this agreement. This is something that, as we’ve seen with some of the previous trade agreements, the Green Party feels very strongly around, particularly when it comes to the Comprehensive and Progressive Trans-Pacific Partnership agreement as well as the regret around retainment of the ISDS in the second protocol of the ASEAN-Australia-New Zealand Free Trade Agreement.
The other thing that the Minister mentioned in terms of some of the tariff elements is also something that we’re very interested in in terms of the benefits to Aotearoa New Zealand, but not just to those peak bodies but also particularly to those smaller companies and your kind of ground level, smaller, locally producing farmers. It is also not just from a local perspective but also from what is going to be the future, and one of the bulwarks, one of the strongholds, for organic production in the region.
A couple of the questions I do have for the Minister. Now, one of the things that we’ve seen is around the new strategy for Trade For All. I want to also draw the House’s attention to the Standing Orders review that was conducted last year around the review of the international treaty process, particularly when it comes to the idea of public consultation, because, understandably, when we’re looking at international treaties and agreements, it is one of the areas that the Government—the executive—has absolute control over, and yet it’s not up for public consultation during the select committee process until much later, when the agreement is signed.
Considering the announcement that the Minister has made, my first question is: what public consultation has actually taken place? Based on the time line that is available, there are a lot of conversations between the two parties involved, but I’m not seeing a lot of consultation with the general public, particularly, in this case. I understand and thank the Minister for having sort of Māori requirements around Te Tiriti o Waitangi, but in this particular case, what hapū or iwi have been explicitly involved in part of the decision-making process and have they been adequately heard? That’s my first question.
My second question to the Minister is that, in looking at the trade, it’s incredibly important and it’s going to be incredibly beneficial, but, as we see with all trade agreements, there are also certain checks and balances that need to be in place and certain measures for accountability that need to be in place, and that is something that I have not been able to find at present. Hopefully, the broader reads of the full CEPA will be enlightening around this, but I want to ask the Minister: in terms of the agreement itself and measures for accountability, what accountability is there in terms of the obligations of Aotearoa and the United Arab Emirates (UAE) under the Paris Agreement, particularly not just in terms of sustainable energy but also climate mitigation and climate adaptation internationally? I know that the UAE, for example, has done a lot of work in the Pacific region. However, I am asking specifically about internally and domestically when it comes to some of those measures for accountability, both for Aotearoa as well as for the UAE.
The second part is in terms of some of the other elements of measures of accountability around things such as involvement in workers’ rights, particularly when it comes to elements of modern slavery—which I know that Aotearoa is very interested in—as well as other elements in terms of contributions to war, which I’m sure that the Minister will agree is currently a very hot topic in the general region of the Middle East as well as the Arab Gulf. In this particular case, what are some of the measures for those kinds of involvements and checks and balances within that particular agreement? If the Minister wouldn’t mind answering, that would be great.
Lastly, I would like to also extend a warm welcome—al salam alaikum—to Dr Thani bin Ahmed Al Zeyoudi from the UAE.
Mr Speaker, thank you, and I thank my two colleagues for their thoughts and their best wishes and gratitude to our visitor. It shows Parliament can be at its best on behalf of New Zealanders when we focus on the things that are important.
To David Parker: the reason that the Integrated Cargo System is not in this is actually that the interests of New Zealanders, when they invest overseas, can be met government to government in agreements like that—very similar to previous agreements passed through the House. It’s the same response, I think, to my colleague from the Green Party Dr Lawrence Xu-Nan.
In as far as the public’s involvement in the negotiation of trade agreements is concerned, as with previous Governments, we have to balance out understanding the views of the public and getting the very best deal for all of them. Sometimes it’s not advantageous to either side to be negotiating in public, but we go out before we start an agreement and we seek the views of industry groups, of unions, of iwi, and many others—as well as members of the public where we can—as to what are the important issues to put into the agreement. Then we follow through with that.
During a negotiation, where it is necessary to go back to the various groups—more often the business community but not only the business community—negotiators and the ministry are able to do so. Then, finally, upon agreement, we talk directly to a range of stakeholders including iwi groups—some directly, who have interest in the trade themselves—but the Ministry of Foreign Affairs and Trade, at the time of the last Government, set up a number of iwi representative groups that we engage with often and seek their views and value their views which inform this outcome.
In as far as the Standing Orders are concerned, a trade agreement is not able to—nor should it—have an effect upon those. However, from the point of view of ensuring that all New Zealanders have the opportunity to understand that trade delivers benefits to every single person in New Zealand, we will be as open as we can in providing information and having them have a view to comment. Indeed, when the legislation to enact comes through Parliament, you should expect not only a full committee opportunity hearing for people, but at the same time we’ve had occasions where we’ve reached agreement that we can have a debate in Parliament about that rather than it just going through quietly.
The member also mentioned a number of other areas around climate change, and so on. The texts are very similar to other agreements. No agreement is ever the same, because it’s a negotiation, but to give you an example, the United Arab Emirates and New Zealand both have significant interest in the Government’s focus on renewable energy. Indeed, the United Arab Emirates (UAE) spends a lot of money in the UAE and around the world to work with others to develop new types of sustainable energy that can meet the requirements as well as climate change. The spirit of that, though, remains in this agreement.
Although I won’t go to all of the different parts about the checks and balances, the member mentioned the labour outcomes in the agreement. The trade and sustainable development chapter recognises the importance of the International Labour Organization (ILO) Constitution and ILO Declaration on Fundamental Principles and Rights at Work that’s been in previous agreements. It is followed through to this one.
Thank you, Mr Speaker. On behalf of ACT, I would like to join the Minister in welcoming His Excellency Dr Thani bin Ahmed Al Zeyoudi, the United Arab Emirates (UAE) Minister of State for Foreign Trade, and his delegation. ACT would like to thank the officials of both countries, New Zealand and the United Arab Emirates, who have worked to get this excellent agreement completed. It’s especially great that the deal has been announced while His Excellency Dr Thani bin Ahmed Al Zeyoudi and his delegation is still here. The speed with which this deal was achieved, combined with the extent to which trade barriers have been removed, sets an impressive benchmark for future deals.
Free trade is a win-win. Kiwi dairy farmers, meat producers, and manufacturers will be able to sell more products at competitive prices to the people of the UAE, who will, in turn, benefit from greater choice and competition. In return, New Zealanders will be able to access products from UAE businesses with fewer tariffs and barriers, and this is important as we work to address the cost of living.
It’s also great to see that other than the tariff elimination, the agreement includes commitments for equal access to services, Government procurement, and investment too. ACT is strongly pro-trade. We believe that the free exchange of goods between different countries is key to lifting human prosperity. Trade also fosters diplomacy, peace, and friendship between different peoples. As a nation, New Zealand ought to promote the value of trade unapologetically, especially as we advance negotiations with our next major trade deal with India. Thank you, Mr Speaker.
Dr Lawrence Xu-Nan: Mr Speaker?
Dr Lawrence Xu-Nan, your time was well and truly used up.
Dr Lawrence Xu-Nan: Oh, I thought I had 10 seconds left.
How many seconds?
Dr Lawrence Xu-Nan: 10.
No, it’s one.
Dr Lawrence Xu-Nan: Oh, was it?
Yeah.