New Zealand is getting a leg up in the competitive market of global exports.
A free trade agreement has been made between New Zealand and the Middle East countries belonging to the Gulf Cooperation Council.
It comprises Saudi Arabia, UAE, Kuwait, Qatar, Oman, and Bahrain.
Trade Minister Todd McClay told Mike Hosking New Zealand will be able to trade more with these countries.
He says the tariffs weren't high, but bringing them down to zero gives exporters a competitive advantage.
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Episode Transcript
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Speaker 1 (00:00):
I always happy to report good news for the economy.
(00:02):
Today it's another trade deal, this time the Golf Cooperation Council.
That's a grouping of six Arab states. You got bar
raing q Eight, Aman, Qatar, Saudi Arabia and the UAE.
The deal being described as the best the GCC has
done yet from Doha. Trade Minister Tom McClay Morning, make
good morning, described as an eighteen year long ambition.
Speaker 2 (00:20):
Why has it taken so long?
Speaker 3 (00:22):
Well, look, it's been a range of things.
Speaker 4 (00:24):
You might remember that many years ago we got quite
close and then there was an issue with Saudi Arabia
around live sheep exports. I was able to re engage
with the GCC ministers in February of this year. I've
had seven this is my seventh visit up here and
I'm just very very pleased that we've been able to
land this deal.
Speaker 3 (00:43):
It's really good for our exporters.
Speaker 4 (00:45):
It's one of the highest quality deals the GCC has
ever done.
Speaker 1 (00:48):
So they would be what you would call, and I
reference once again the UK Deal true free traders.
Speaker 3 (00:55):
Yeah, well, yes and no.
Speaker 4 (00:57):
In as far as our agreement is concerned, we have
ninety nine percent of our exports will be tariff free
over ten years when we add the UAE deal to it,
which we did a month ago, about fifty percent on
day one on entry into force. So in that respect, yes,
But if you look at all the other trade deals
have done and have done a few now, they're much
(01:18):
lower levels of ambition. So one of the things we've
been able to do during the course of the last
seven months is raised that level of ambition and demonstrate
to them that, you know, getting rid of these tariffs,
even over time, will be good for both sides. And
I'll tell you what they're most interested in us now
because that issue of the live sheep exports is gone.
It's finished, it wasn't raised, there's nothing in the agreement
(01:40):
about that, so no commitments, nothing at all. What they
really are after now is to be able to feed
their own citizens and a growing tourism industry with high
quality save food, and I reckon that's why we the
crackt They have a lot of interest in that.
Speaker 3 (01:53):
You know that from New Zealand.
Speaker 2 (01:54):
Is there a bit of a theme.
Speaker 1 (01:55):
I don't know if you've caught up on this because
you're traveling the world, but Shane Jones came back from Singapore.
What Singapore interested in is food security. Is food security
for a country like us, the go to play it is.
Speaker 4 (02:09):
Now post COVID, Yes, absolutely, and when if you look
at the world at the moment, you know with all
the uncertainty and geopolitics, it is and food security is
two things. It's safe food because even if you have food,
if you're not sure it's safe for your citizens to consume,
you know, it's.
Speaker 3 (02:25):
Not the same.
Speaker 4 (02:26):
And then making sure you have enough of it. And
certainly the conversations I've had with the various countries and
all six of the trade ministers from these countries today
here when we are initial, you know, the end of
negotiation is their desire to have long term, sustainable relationships
where when they need the food, we will supply it
(02:46):
to them.
Speaker 3 (02:47):
And that's something we said we'll work through.
Speaker 4 (02:48):
But the first step is to get those tariffs out
of the way, get some certainty so in New Zealanders
can invest time and effort into you know, this trade relationship.
Speaker 1 (02:56):
What's the growth path on this deal? Because if you
look at the GCC, it's made up of a bunch
of countries including the UAE. But we've got a separate
UAE deal. The big money seems to be with the
UAE in Saudi Arabia.
Speaker 3 (03:09):
Yeah, that's right.
Speaker 4 (03:10):
We sell there's about three billion dollars worth a two
way trade.
Speaker 3 (03:14):
We sell them two point six billion every year.
Speaker 4 (03:17):
Of that therere is about one point seven billion, and
red meat about two hundred and sixty million. Their terriff
rates are not high, but you know, it's a very
competitive market. So even getting them to zero gives us
a competitive advantage.
Speaker 3 (03:31):
But this deal, as with the UE.
Speaker 4 (03:32):
Is about how much more we can trade with them,
not what we're doing now. And look, I suspect that
over the next four or five years we'll see that
two and a half billion dollars with exports jump significantly.
Speaker 3 (03:45):
The very very big lamb meters.
Speaker 4 (03:48):
We don't sell them a lot of lamb, but they
will start buying it from us. So for our sheep
farmers are doing it hard. It's a real opportunity here.
The other thing that I think is very important. We've
got a lot of a liberalization of services. So if
you think about Saudi Arabia, they're investing trillions of dollars
into infrastructure.
Speaker 3 (04:07):
They are building their country.
Speaker 4 (04:09):
We already have engineering firms and others up here from
New Zealand. They now have greater rights under this agreement,
and I think we'll see our services trade grow significantly
at the same time as we sell them more food
and fiber.
Speaker 1 (04:22):
Quick word on India story here yesterday. They're changing the
way they engage with the world. They're not interested in
small countries. They want to do the big play. Is
that a problem for us or not?
Speaker 3 (04:33):
Well, no, it's not.
Speaker 4 (04:34):
We're putting a lot of effort into that relationship. And
you know, again, I've had six or seven visits and
it's building.
Speaker 3 (04:40):
We're starting to sell more.
Speaker 4 (04:41):
And two directions, the Indian President visited New Zealand and
at the same time, you know, there's an invitation from
Prime Minister Modi for Prime Minister.
Speaker 3 (04:50):
Lux to visit as well.
Speaker 4 (04:52):
I think what that signaling is they do want to
do deals with larger countries because they haven't got any
of those. They haven't got the EU, they haven't got
the UK, they haven't got the US, they haven't got China.
But in my engagement with them, there are other reasons
that they are interested in New Zealand, and some of
that is the innovation and technology we have around agriculture,
so I'm still very optimistic there.
Speaker 3 (05:13):
That is all.
Speaker 4 (05:14):
We've always said that relationship over the last six years
of the labor government was underdone and we have to
invest in it first before we get close to.
Speaker 3 (05:21):
A trade arrangement. I'll have another trip up to India
before the end of the year.
Speaker 4 (05:25):
I'm just going to keep putting the effort in because
if we don't, we know what we get, which is nothing.
Speaker 2 (05:29):
Good on You have a good weekend, appreciate it. From Doha.
Todd McLay, the Trade Ministry.
Speaker 4 (05:33):
For more from the Mic Asking Breakfast, listen live to
news talks. It'd be from six am weekdays, or follow
the podcast on iHeartRadio.
I always happy to report good news for the economy.
(00:02):
Today it's another trade deal, this time the Golf Cooperation Council.
That's a grouping of six Arab states. You got bar
raing q Eight, Aman, Qatar, Saudi Arabia and the UAE.
The deal being described as the best the GCC has
done yet from Doha. Trade Minister Tom McClay Morning, make
good morning, described as an eighteen year long ambition.
Speaker 2 (00:20):
Why has it taken so long?
Speaker 3 (00:22):
Well, look, it's been a range of things.
Speaker 4 (00:24):
You might remember that many years ago we got quite
close and then there was an issue with Saudi Arabia
around live sheep exports. I was able to re engage
with the GCC ministers in February of this year. I've
had seven this is my seventh visit up here and
I'm just very very pleased that we've been able to
land this deal.
Speaker 3 (00:43):
It's really good for our exporters.
Speaker 4 (00:45):
It's one of the highest quality deals the GCC has
ever done.
Speaker 1 (00:48):
So they would be what you would call, and I
reference once again the UK Deal true free traders.
Speaker 3 (00:55):
Yeah, well, yes and no.
Speaker 4 (00:57):
In as far as our agreement is concerned, we have
ninety nine percent of our exports will be tariff free
over ten years when we add the UAE deal to it,
which we did a month ago, about fifty percent on
day one on entry into force. So in that respect, yes,
But if you look at all the other trade deals
have done and have done a few now, they're much
(01:18):
lower levels of ambition. So one of the things we've
been able to do during the course of the last
seven months is raised that level of ambition and demonstrate
to them that, you know, getting rid of these tariffs,
even over time, will be good for both sides. And
I'll tell you what they're most interested in us now
because that issue of the live sheep exports is gone.
It's finished, it wasn't raised, there's nothing in the agreement
(01:40):
about that, so no commitments, nothing at all. What they
really are after now is to be able to feed
their own citizens and a growing tourism industry with high
quality save food, and I reckon that's why we the
crackt They have a lot of interest in that.
Speaker 3 (01:53):
You know that from New Zealand.
Speaker 2 (01:54):
Is there a bit of a theme.
Speaker 1 (01:55):
I don't know if you've caught up on this because
you're traveling the world, but Shane Jones came back from Singapore.
What Singapore interested in is food security. Is food security
for a country like us, the go to play it is.
Speaker 4 (02:09):
Now post COVID, Yes, absolutely, and when if you look
at the world at the moment, you know with all
the uncertainty and geopolitics, it is and food security is
two things. It's safe food because even if you have food,
if you're not sure it's safe for your citizens to consume,
you know, it's.
Speaker 3 (02:25):
Not the same.
Speaker 4 (02:26):
And then making sure you have enough of it. And
certainly the conversations I've had with the various countries and
all six of the trade ministers from these countries today
here when we are initial, you know, the end of
negotiation is their desire to have long term, sustainable relationships
where when they need the food, we will supply it
(02:46):
to them.
Speaker 3 (02:47):
And that's something we said we'll work through.
Speaker 4 (02:48):
But the first step is to get those tariffs out
of the way, get some certainty so in New Zealanders
can invest time and effort into you know, this trade relationship.
Speaker 1 (02:56):
What's the growth path on this deal? Because if you
look at the GCC, it's made up of a bunch
of countries including the UAE. But we've got a separate
UAE deal. The big money seems to be with the
UAE in Saudi Arabia.
Speaker 3 (03:09):
Yeah, that's right.
Speaker 4 (03:10):
We sell there's about three billion dollars worth a two
way trade.
Speaker 3 (03:14):
We sell them two point six billion every year.
Speaker 4 (03:17):
Of that therere is about one point seven billion, and
red meat about two hundred and sixty million. Their terriff
rates are not high, but you know, it's a very
competitive market. So even getting them to zero gives us
a competitive advantage.
Speaker 3 (03:31):
But this deal, as with the UE.
Speaker 4 (03:32):
Is about how much more we can trade with them,
not what we're doing now. And look, I suspect that
over the next four or five years we'll see that
two and a half billion dollars with exports jump significantly.
Speaker 3 (03:45):
The very very big lamb meters.
Speaker 4 (03:48):
We don't sell them a lot of lamb, but they
will start buying it from us. So for our sheep
farmers are doing it hard. It's a real opportunity here.
The other thing that I think is very important. We've
got a lot of a liberalization of services. So if
you think about Saudi Arabia, they're investing trillions of dollars
into infrastructure.
Speaker 3 (04:07):
They are building their country.
Speaker 4 (04:09):
We already have engineering firms and others up here from
New Zealand. They now have greater rights under this agreement,
and I think we'll see our services trade grow significantly
at the same time as we sell them more food
and fiber.
Speaker 1 (04:22):
Quick word on India story here yesterday. They're changing the
way they engage with the world. They're not interested in
small countries. They want to do the big play. Is
that a problem for us or not?
Speaker 3 (04:33):
Well, no, it's not.
Speaker 4 (04:34):
We're putting a lot of effort into that relationship. And
you know, again, I've had six or seven visits and
it's building.
Speaker 3 (04:40):
We're starting to sell more.
Speaker 4 (04:41):
And two directions, the Indian President visited New Zealand and
at the same time, you know, there's an invitation from
Prime Minister Modi for Prime Minister.
Speaker 3 (04:50):
Lux to visit as well.
Speaker 4 (04:52):
I think what that signaling is they do want to
do deals with larger countries because they haven't got any
of those. They haven't got the EU, they haven't got
the UK, they haven't got the US, they haven't got China.
But in my engagement with them, there are other reasons
that they are interested in New Zealand, and some of
that is the innovation and technology we have around agriculture,
so I'm still very optimistic there.
Speaker 3 (05:13):
That is all.
Speaker 4 (05:14):
We've always said that relationship over the last six years
of the labor government was underdone and we have to
invest in it first before we get close to.
Speaker 3 (05:21):
A trade arrangement. I'll have another trip up to India
before the end of the year.
Speaker 4 (05:25):
I'm just going to keep putting the effort in because
if we don't, we know what we get, which is nothing.
Speaker 2 (05:29):
Good on You have a good weekend, appreciate it. From Doha.
Todd McLay, the Trade Ministry.
Speaker 4 (05:33):
For more from the Mic Asking Breakfast, listen live to
news talks. It'd be from six am weekdays, or follow
the podcast on iHeartRadio.
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