New Zealand is pressing to finalise a stalled free trade deal with the six-nation Gulf Cooperation Council (GCC) that includes two of the Middle East’s largest economies, Saudi Arabia and the United Arab Emirates.
Trade Minister Todd McClay visited the UAE and Kuwait this week in an effort to promote the deal with the GCC, his country’s sixth largest trading partner. The GCC comprises Saudi Arabia, the UAE, Kuwait, Qatar, Bahrain and Oman.
New Zealand wrapped up talks on the trade pact in 2009 but it has never been ratified.
“There is still some work to do but I’m optimistic we can make some pretty good progress in the course of this year,” McClay told Reuters in an interview at the New Zealand Consulate in Dubai on Tuesday.
Two-way trade between New Zealand and the GCC is worth around NZ$3 billion ($2.16 billion) annually. New Zealand’s main exports to the region include dairy, sheep meat and wood, key components in the Pacific nation’s export basket.
McClay’s regional visit follows a meeting with his Saudi Arabian counterpart Majid bin Abdullah Al Qasabi last September when both ministers agreed to complete the deal.
“The time is right to take those last steps to create the framework that will help business and trade grow between the GCC and New Zealand,” McClay said.
Gulf states are undergoing a period of economic reform following more than two years of low global oil prices that forced a tightening of regional budgets.
McClay said the pressure of low oil prices and other changes in the global economy had prompted the Gulf states to rethink their policies on foreign trade.
New Zealand is also pursuing a trade deal with the European Union, with talks expected to start sometime this year. It also plans to start negotiations with the United Kingdom after it exits the EU.
McClay said it was “more than possible” to finalise a New Zealand-UK trade pact in two to three years once talks start.
“We will have to wait and see. It will really depend ultimately on what the formal trading relationship is between the UK and EU as to what we might consider,” McClay said, adding that an agreement with the UK was “a little way away.”
New Zealand is also watching what the incoming Trump administration will do with the Trans-Pacific Partnership (TPP), a 12-nation Asia-Pacific trade pact to which Wellington is a signatory and which includes the United States but not China.
President-elect Donald Trump has said he will axe the agreement after he takes office on Jan. 20. The pact is awaiting ratification.
The new U.S. administration should be given the courtesy “to come to terms” with their trade policy, McClay said, adding that Washington needed to show leadership in trade.
If the TPP does fail, McClay said, it would be “interesting to see momentum build around RCEP (Regional Comprehensive Economic Partnership)” – a proposed Asian trade pact that includes China and India.