Aussie ratification pushes CPTPP deal across the line
The Comprehensive and Progressive Trans-Pacific Partnership trade and investment pact will come into effect next month after Australia's ratification pushed the deal across the minimum acceptance threshold.
The deal has been ratified by New Zealand, Australia, Canada, Mexico, Japan and Singapore. Australia's confirmation started the 60-day countdown for the first round of tariff cuts now scheduled to come into effect from December 30.
"The timing means there will be the added bonus of a second round of tariff cuts on 1 January 2019 for New Zealand exporters into those markets which apply a calendar tariff year," Trade and Export Minister David Parker said in a statement. "In the case of Japan, this second round of tariff cuts would fall due on 1 April 2019."
New Zealand's Parliament passed legislation ratifying the deal last week. The Ministry of Foreign Affairs and Trade's national interest analysis estimated the agreement will boost the economy by between $1.2 billion and $4 billion, due largely to the removal of tariffs and non-tariff barriers to trade.
The countries that have ratified the deal account for about $14.65 billion of New Zealand's annual exports, the bulk of which goes to Australia, and about $13.67 billion of imports.
The CPTPP morphed out of the Trans-Pacific Partnership agreement. Countries including New Zealand and Japan tried to revive the Asia-Pacific trade and investment pact after US President Donald Trump walked away from the initial deal.
The Labour-led administration was wary of the TPP, and was reluctant to sign unless it could restrict foreign buyers of residential property and water down some of the more onerous Investor State Dispute Resolution provisions.
New Zealand has signed side letters with Australia, Peru, Malaysia, Vietnam and Brunei excluding the use of ISDS provisions.
Brunei Darussalam, Chile, Malaysia, Peru and Vietnam haven't yet ratified the deal.
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