The coalition Government has secured its first free trade deal, an agreement between New Zealand and the United Arab Emirates (UAE).
The deal would see almost all tariffs removed from exports to the Gulf country.
“This is the fastest we have ever negotiated a deal in New Zealand and it is one of the highest-quality on entry into force,” Trade Minister Todd McClay said.
Negotiations with the UAE took just four months.
“This high-quality trade agreement will provide New Zealand with duty-free access for 98.5% of our exports to the UAE, rising to 99% after three years.”
UAE Trade Minister Thani Bin Ahmed Al Zeyoudi said the Emirates, meanwhile, “will gain a vital partner in our food security objective, and will open a door for investment opportunities in tourism, logistics, and agriculture”.
Exporters said they were very happy with the new deal.
“In the last year, there’s been $700 million of dairy exports to the UAE – largely milk powders, but also some cheese, butter, and smaller volumes of other products,” Kimberly Crewther, executive director of the Dairy Companies Association, said.
Geopolitical analyst Geoffrey Miller said he expected to see a spike in exports between the two countries.
“They’re already at $1 billion a year, which is no small change,” he said.
The trade deals could potentially be expanded to include all six Arab states, which are part of the Gulf Cooperation Council (GCC).
“We work on both tracks, and usually the minute that we conclude the bilateral, it speeds up the GCC track,” Al Zeyoudi said.
“This is going to be a springboard for their efforts in the Indo-Pacific. The Gulf States are increasingly looking east,” Miller said.
It comes as the UAE faces claims of migrant worker exploitation. Al Zeyoudi was asked if the new deal acknowledged and protected the rights of workers.
“Labour has been considered heavily throughout the negotiation, and we’re only focussing on the highly talented people,” he said.
“We don’t focus on the blue collars or the low-skilled labourers because the main intention of CEPAS and the free trade agreements is to ensure that we bring the productivities and ensure that we focus on the advanced technology.”
McClay said the key to today’s deal was about strengthening New Zealand’s ties with the UAE.
“Not only has a friendship grown but actually, the agreement is in the best interests of the people of both countries.”