SHANGHAI – In an effort to accelerate economic growth and create job opportunities, a number of New Zealand’s most prolific business executives have urged the island-country to sign a multitude of new free trade agreements (FTAs).
According to a survey by chartered accountants firm Grant Thornton, 81 percent of New Zealand’s top business leaders believe that the pursuit of new free trade deals should be at the top of the country’s agenda. Their report further added that, whilst New Zealand’s recent acquisition of a seat on the UN Security Council will help boost its ability to negotiate FTAs, a lot of work will also be required from the government.
The importance of FTAs to the New Zealand economy is clear to see. The small size of the country and its domestic market cannot sustain its most important industries, which include the fishing, mining, and agricultural sectors, and this in turn necessitates the need for a high level of exports. The successful negotiation of favorable free trade deals is therefore absolutely critical for continuous growth, and would further create more opportunities for New Zealand’s small and medium enterprises (SMEs).
In the past, New Zealand has certainly not been idle in its pursuit of FTAs. Since the turn of the century, the country has concluded agreements with three of Asia’s biggest and most important markets – China, Thailand and Singapore – and has initiated talks with a number of others. Nevertheless, for the business leaders surveyed in Grant Thornton’s report, the concern is likely that these talks have been continuing for far too long. Negotiations with India and Russia, for example, have been ongoing for several years without any agreement for a final deal being struck.
However, last week saw a breakthrough for New Zealand’s foreign trade prospects. On Friday, officials concluded negotiations with South Korea over a long-awaited FTA between the two countries. South Korea ranks as New Zealand’s fifth largest trading partner, and the signing of the deal is estimated to be worth around $US4.5 billion to the New Zealand economy over the course of the next 25 years.
The conclusion of the South Korea talks could be the first of several new FTAs for New Zealand. Indeed, spurred on by the urging of its business sector, it may be that the New Zealand government pushes ahead with some of its protracted negotiations with other key trading partners, and it would undoubtedly be in their best interest to do so.
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