New Zealand's trade relationship with the Association of Southeast Asian Nations (ASEAN) has been significantly bolstered by the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA). Since its implementation in 2010, AANZFTA has paved the way for enhanced economic cooperation and mutual growth between New Zealand and ASEAN member states.
AANZFTA: GOOD OR BAD?
Anson Lam, Associate at Moore Markhams Auckland and a member of the joint Moore Australia and Moore Markhams
Asia Desk, highlights the substantial benefits of AANZFTA. "The agreement has provided New Zealand businesses with improved market access and reduced tariffs across a wide range of goods. This has been instrumental in boosting trade volumes and fostering stronger economic ties with the ASEAN region."
The Ministry of Foreign Affairs and Trade (MFAT) outlines several key advantages of AANZFTA. Since its implementation, the agreement has significantly reduced tariffs on over 90% of goods traded between New Zealand and ASEAN countries. This reduction has made New Zealand products more competitive in the ASEAN market, leading to a 60% increase in exports to the region. ASEAN is now one of New Zealand's top trading partners, alongside Australia, China, and the US.
DEMAND FOR QUALITY
The strategic importance of the ASEAN market for New Zealand businesses cannot be overstated. "Southeast Asia is a rapidly growing market with a collective GDP projected to reach $10 trillion by 2030. The region's burgeoning middle class is driving demand for high-quality goods and services, presenting significant opportunities for New Zealand exporters," notes Anson Lam.
The AANZFTA agreement also includes provisions for services and investment, further enhancing economic integration. "New Zealand's expertise in sectors such as education, healthcare, and technology is highly valued in ASEAN countries," says Anson Lam. "The agreement's comprehensive coverage ensures that our businesses can not only trade goods but also provide services and invest in the ASEAN market with greater confidence."
CREATING OPPORTUNITY
Lisa Canale, Director at Moore Australia (SA/NT), food business expert and a fellow Asia Desk member, underscores the potential for growth in the agriculture and food sector. "New Zealand's agricultural exports to ASEAN have grown substantially under AANZFTA. The agreement has opened up new markets for our dairy, meat, and horticultural products. With ASEAN's population expected to surpass 700 million by 2030, the demand for high-quality, safe food products will continue to rise."
However, navigating the diverse regulatory environments within ASEAN remains a challenge. "It's crucial for New Zealand businesses to understand and adapt to the regulatory frameworks of each ASEAN country," says Anson Lam. "Collaborating with local partners and leveraging the support provided by AANZFTA can help mitigate these challenges."
A FOCUS ON GREEN ENERGY
The green energy transition is another area of potential collaboration. As outlined in the Southeast Asia Economic Strategy to 2040, ASEAN countries are increasingly focusing on sustainability and renewable energy. "New Zealand's expertise in renewable energy technology can significantly contribute to ASEAN's green transition goals," says Anson Lam. "This not only supports environmental sustainability but also opens new avenues for trade and investment."
SETUP FOR SUCCESS
In conclusion, the AANZFTA has been a game-changer for New Zealand-ASEAN trade relations. By capitalising on the opportunities provided by the agreement and addressing the challenges, New Zealand can further strengthen its position as a key trading partner in this dynamic region.
Statistics and insights drawn from:
The ASEAN-Australia-New Zealand Free Trade Area | New Zealand Ministry of Foreign Affairs and Trade (mfat.govt.nz)