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CPTPP takes effect on January 1

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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.
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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 January 1 for NZ exporters into those markets which apply a calendar tariff year,” Trade and Export Minister David Parker said. 

“In the case of Japan this second round of tariff cuts would fall due on April 1.”

NZ’s Parliament passed legislation ratifying the deal two weeks ago. 

The Ministry of Foreign Affairs and Trade’s national interest analysis estimates the agreement will boost the economy by between $1.2 billion and $4b, largely because of the removal of tariffs and non-tariff barriers to trade. 

The countries that have ratified the deal account for about $14.65b of NZ’s annual exports, the bulk of which goes to Australia, and about $13.67b of imports. 

The CPTPP morphed out of the Trans Pacific Partnership. Countries including NZ and Japan tried to revive the Asia-Pacific trade and investment pact after United States 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. 

NZ 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. – BusinessDesk

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