Cows photographed in New Zealand. Agriculture plays an important 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 must 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), is seen by Prime Minister Christopher Luxon as an opportunity to expand bilateral trade between the two countries and make the UAE one of the island’s largest markets in the Middle East. one.
“Our relationship is more than 40 years old and has diplomatic recognition, and now our real opportunity is to deepen and expand the economic relationship,” Luxon told CNBC on Monday.
“That’s why it’s so important to sign CEPA and the bilateral investment treaty because these are actually two small developed economies in the world that actually have a lot in common and
There are a lot of shared values and we hope to work together and build that relationship.
New Zealand’s main exports to the UAE include dairy products, industrial products, meat, horticultural products and tourism services. Announcing the deal, the government said. The deal is expected to come into effect later this year, with the government aiming to double exports within a decade. It is said that CEPA will mean that 99% of New Zealand commodity exporters can enter the UAE market duty-free.
“This includes all New Zealand dairy, red meat, horticulture and industrial products immediately after the agreement comes into effect,” it states.
“A quarter of New Zealand’s jobs are closely related to trade,” Lukeson, leader of the center-right New Zealand National Party, which has been in power since late 2023, told CNBC’s Dan Murphy in Abu Dhabi on Monday.
“When you look at a New Zealand company that exports around the world, it has the ability to pay its workers
Salaries and wages are 7% higher, and they tend to be our more productive companies. The message to people at home is that they understand we are a trading nation. We’re not going to get rich just selling stuff to each other in the South Pacific or New Zealand,” he said.
“We actually need to deliver quality products and services to all parts of the world, which are in high demand, and make sure that we open up new markets like the Middle East to really get those products. By doing that, we bring more Bringing more money back into the country is clearly the way we can afford better public services such as health 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 the economy shrank 1% in the July-September quarter.
The decline followed 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: Incoming Prime Minister and National Party Leader Christopher Luxon speaks during a media stand-up session at Parliament on November 3, 2023 in Wellington, New Zealand. Special ballots cast overseas and by post were certified on Friday, finalizing the outcome of New Zealand’s general election. Labor was soundly defeated by Christopher Luxon’s National Party, which won the most votes. However, National needs the support of ACT and New Zealand First to form the next coalition government. (Photo by Hagen Hopkins/Getty Images)
Hagen Hopkins | Getty Images News | Getty Images
Luxon said there was no doubt that the past three years had been “a very challenging time” for the country, but he said inflation, 2.2% in Octoberare under control and interest rates are falling. The country’s central bank has Said it would further relax policies at the next meeting on February 19.
“Our business confidence is at its highest level in a decade. Our consumer confidence is at its highest level in three years. We have Farmers’ confidence reaches highest level since 2017 So we know we have the conditions in place for people to believe there is a better future,” he added.
“Now we have to transform and really drive growth and that’s where strengthening international trade links comes in, but also encouraging inbound investment into New Zealand.”
When asked how he felt about Donald Trump’s return to power in the United States, and the possibility of tariffs on U.S. exports that the president-elect has widely hinted at (possibly a common 10% or 20% levy on all goods imported into the U.S. When tariffs hit the U.S., Luxon said he was in “wait and see” mode.
“We will work well with any government the American people choose, and they have
Donald Trump and a Republican administration were chosen. I have every confidence that we will work constructively with them. We’re going to have to wait and see how the tariff policy actually plays out, or what it will play out,” he said.
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