Te Taumata December Panui

Kia ora koutou,

Thank you so much to all of you for your support of our kaupapa this year. Many would describe 2020 as an isolating year, but for us, it has been about bringing people together. We’ve been fortunate enough to hold three big regional trade hui, and many additional opportunities for Māori businesses to kōrero with one another and government decision makers about this unprecedented trading environment.

I was at a tangihanga and unable to attend the Whakatū hui in Nelson last week, but the feedback was unbelievably positive, as you can read below.

With the new RCEP trading agreement signed, the transition to Brexit wrapping by the end of the month, and the ongoing global complications of COVID-19, 2021 will present new challenges, but also new opportunities for Māori businesses trading internationally.

Our Māori businesses are estimated to contribute $50 billion to the economy, and provide one in four jobs. We will need to work hard, smart and collaboratively to ensure the best outcomes for our whānau.

I hope you enjoy our regular updates and I look forward to working with you in the New Year.

Meri Kirihimete,

Chris Karamea Insley

Hui recap

Iwi leaders, government officials, international representatives and members of the business community came together in Nelson last Tuesday to discuss strategies to supercharge Māori success through trade.

The Government’s partnership with Māori is a priority that is inextricably linked to Aotearoa’s overall Trade Recovery Strategy. Ensuring a Māori voice at the table will position us not only as a distinct, diverse and dependable member of the global community, but a lucrative trading nation with which to do business.

Rachel Taulelei, CEO of KONO, stressed the importance of progressing Māori trade as a way of emerging from the economic strain of COVID-19.

“As an island nation at the bottom of the world, we really need the world, but they need us too. I deeply believe that what Aotearoa has to offer is the best thing for the world.”

Indigenous economies are at the heart of what moves the dial, she said.

“What’s good for the Māori economy is good for the broader economy of the country and the world.”

Vangelis Vitalis, deputy secretary (trade and economic) at the Ministry of Foreign Affairs and Trade, pointed out that in the Whakatū Nelson region alone, 29,000 jobs depend on exports, and that these roles tend to command higher wages.

The free trade agreements that New Zealand is forging with other nations helps to give New Zealand businesses a competitive advantage overseas through lower tariffs, and to level the playing field among a sea of international competitors who have agreements in place. They also help New Zealand businesses diversify their trading partners and minimise risk.

“People over-exposed in markets like China could think about diversifying into other markets with free trade agreements,” Vitalis said.

Every free trade agreement that New Zealand signs protects our domestic policy and sovereignty with a robust Treaty of Waitangi clause, he said.

RCEP media coverage

Last month Prime Minister Jacinda Ardern and the new Minister for Trade and Economic Growth, Damien O’Connor, signed the RCEP along with ten ASEAN nations.

The agreement streamlines documentation requirements, and reduces red tape for Māori exporters, allowing New Zealand businesses to simplify trade and deepen relationships with the Asia-Pacific region.

As Chris Karamea Insley was quoted saying:

“We know that one in every four jobs that gets created in New Zealand is directly derived from international trade. Jobs are so fundamentally important to our Māori people. We need trade enabled for products from our farms and our businesses, in order to be able to employ our people at home.”

When Māori business prospers, whānau prospers – and so does the whole of Aotearoa.

Te Taumata is excited about the opportunities the RCEP presents our businesses, who now have fewer hurdles to jump through to get their products to international consumers and less red tape holding them back from entering new markets.

The countries that have signed the agreement are Brunei-Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Viet Nam, Australia, China, India, Japan, South Korea and New Zealand. These trading partners account for 30 per cent of the world’s population and Gross Domestic Product (GDP).

Updates from around the world:

Philippines GDP contracts 11.5%

In the third quarter, GDP in the Philippines contracted 11.5% year-on-year, a larger decrease than what analysts predicted. Economic activity has been picking up as COVID-19 restrictions have gradually eased however, with varying levels of quarantine restrictions still in place across the country. Low consumer confidence and its impact on domestic consumption are a concern for the Philippines.

The effects of the recent typhoons could further weaken household spending and agricultural production. New Zealand’s goods exports to the Philippines are down 5.64% for the year ending September 2020. But optimism amongst government and business there still remains that the Philippine economy is in a good position to recover.

NZ companies eye Egypt as a growth market

A new report titled Focus on Egypt, prepared by the New Zealand Embassy in Cairo in cooperation with New Zealand Trade and Enterprise has been published.

The report focuses on the recent investments in infrastructure in Egypt and the experiences of New Zealand companies in Egypt.

Egypt is viewed as a new frontier market for New Zealand. While already New Zealand’s 29th largest trading partner (second largest in Africa), New Zealand companies operating in Egypt already consider there is good potential for greater growth.

Egypt is investing significantly in its infrastructure and mega projects. With a population of 101 million, it presents a possible growth market for New Zealand goods and services.

Viet Nam economy weathers Covid storm with positive growth

Viet Nam will be one of the few economies this year to experience positive growth, with predictions of GDP growth of between 1.5% and 2.8%.
This flows from Viet Nam’s containment of COVID-19, continued export growth and solid inward FDI, albeit at reduced levels.
Viet Nam’s cash reserves have given it a buffer to provide some COVID-19 relief to citizens and businesses.
COVID-19 impacts have been most keenly felt in the tourism services, aviation and textile sectors. Nationwide unemployment has risen to 4.5%, but the reverberations have been felt more widely in the significant informal sector and amongst vulnerable groups.
Nonetheless, the economic consequences have been less severe than for much of the world, and forecasts for 2021 are that Viet Nam will remain one of the fastest growing economies in the region if COVID-19 can be contained.
For New Zealand, goods trade to Viet Nam has continued to grow this year, with strong increases in dairy and horticulture exports in particular. Trade in services has taken the greatest hit, with education and tourism severely affected.

Italy’s economy set to contract more than 10% in second wave

Italy’s economy performed ahead of predictions in the third quarter, with manufacturing output expanding and stronger than expected activity in the construction, agriculture and retail sectors. Although a sharp drop in tourists has hit the services sector hard.
As its second wave sets in, Italy’s economy looks set to contract by more than 10% in 2020, with a recovery of 5-6% predicted for 2021. The tourism, hospitality and entertainment sectors are expected to remain the worst affected. Prospects for Italy’s manufacturing and export sectors appear better, although these will be strongly linked to business confidence, consumer spending and demand in key global markets. Italy’s public debt, which is projected to reach 163% of GDP by the end of 2020, will remain a vulnerability for its economy going forward.
The government has committed almost €160 billion to mitigate the economic impacts of the crisis. Its response has included investments in strengthening health systems and delivery of core services, measures to support businesses through deferring tax, debt servicing, social security payments and underwriting business loans, initiatives to maintain employment and incomes, and tax breaks to incentivise consumption. These measures represent the largest economic stimulus in Italy’s history, and have had some success in maintaining employment and sustaining domestic demand.
The government has signalled its intention to extend these measures as required in response to pandemic’s second wave, and appears determined avoid extreme measures that would smother growth. The economic impacts of the crisis are increasingly being felt across Italian society, with the latest nationwide restrictions triggering demonstrations in many Italian cities.
Italy is developing a recovery plan to make use of the loans and grants available to it under the EU Recovery Fund.
The crisis has impacted negatively on New Zealand’s exports to Italy, with goods exports down 5% and services down 12% in the year to June. The services sector will remain seriously affected in the year ahead, particularly travel and tourism. Prospects for goods trade are more promising, particularly for businesses supplying Italy’s manufacturing sector, which continues to hold untapped opportunities for New Zealand companies. Businesses supplying the hard-hit food services trade are seeking to offset a collapse in orders by exploring opportunities in Italy’s growing retail grocery, specialty retail and e-commerce sectors.

MFAT Report: Opportunities in the US Wine Sector

A new report on the US Wine Sector, prepared by the New Zealand Embassy in Washington has been published. It includes details on how the COVID-19 pandemic has changed drinking habits in the US, the disruption experienced this year to US wine production, and the impact of protracted US tariffs on European wines.

Webinar: Promoting outcomes for Māori in the NZ-UK Free Trade Agreement

MFAT is presenting a webinar on 11 December from 8:30—9:30am to provide an introduction on what free trade agreements aim to achieve, how their negotiations with the UK will shape up, and how Māori interests are being progressed.

The Zoom webinar will be an opportunity to hear from New Zealand’s Chief Negotiator, Brad Burgess, and other leads covering well known Māori interests such as intellectual property and environment.

If you are interested in joining, RSVP to UK-FTA@mfat.govt.nz and feel free to share your interests and submit questions before 4 December.