Roundup: NZ to talk free trade with Arab countries

New Zealand is trying to make another free trade deal, this time with six oil-rich Arab countries, though existing tariffs are already low.

The deal got a kick-start last week when Trade Minister Phil Goff visited trading partners Saudi Arabia and the United Arab Emirates.

Goff said both countries encouraged New Zealand to enter free trade talks with the Gulf Co-operation Council (GCC) comprising Saudi Arabia, UAE, Kuwait, Bahrain, Qatar and Oman. GCC countries no longer negotiate individual deals.

At present, New Zealand exports about 500 million NZ dollars ( 350 million US dollars) of goods to the region each year, mainly meat and dairy products. New Zealand imports mainly oil-related products worth about 1 billion NZ dollars (700 million US dollars).

A deal would make no difference to rising petrol costs as petrol and oil imports are already tariff-free into New Zealand. Any drop in petrol prices would depend more on the strength of the New Zealand dollar and market forces, said Goff.

If successful, a deal would remove tariffs of between 4 and 5 percent paid on most goods going into the region. It could also help New Zealand expand exports into new areas such as information technology, biotechnology and education. It would also stop New Zealand falling further behind rival exporters such as Australia. The European Union and Australia are already in talks with the GCC, said Goff.

New Zealand officials from the Foreign Affairs and Trade Ministry are already working on free trade deals with China, Malaysia and Hong Kong and the Association of South East Asian Nations, or ASEAN.

The 10 Asean countries include six of New Zealand's top 20 export destinations - Malaysia, the Philippines, Indonesia, Thailand, Singapore and Vietnam.

New Zealand is also heavily involved in World Trade organization talks which will reignite in April when agreement has to be reached between major trading blocs if a deal is to succeed.

The Cabinet would be asked to consider the Arab-nation free trade deal.

"I think with the response that was volunteered in the Gulf, it may be an area accorded some priority in our list of areas we would like free trade agreements with," said Goff.

Source: Xinhua