Taiwan has signed its first economic cooperation agreement with a developed country. The Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation (ANZTEC) was signed in Wellington, New Zealand on July 10 this year. The comprehensive, high quality pact is a significant step toward Taiwan’s objective of greater participation in regional economic integration, but it also speaks to the fundamental issue of why nations trade, which is to improve the lives of their peoples.
Bilateral trade between the two nations stands at some US$1.2 billion annually. The new agreement commits Taiwan and New Zealand to wide-ranging market liberalizations: the eventual elimination of 99 percent of tariff lines on Taiwan’s side, and 100 percent on New Zealand’s for trade in goods; expanded market access for trade in services, including investment, air transportation and e-commerce; and a greater opening of several other areas, such as New Zealand’s government procurement markets. For Taiwan, ANZTEC is expected to increase the nation’s gross domestic product by US$303 million and add more than 6,000 new jobs by the time the accord is fully implemented in 12 years.
In many ways, the economies of Taiwan and New Zealand are highly complementary. The new rules will certainly benefit Taiwan’s exporters of electronic components, machinery, petrochemicals, plastics and stainless steel. In the other direction, Taiwan will enjoy greater access to New Zealand’s high quality dairy products, fruit, lamb and wine.
Beyond the obvious economic benefits for both sides, ANZTEC establishes channels of communication between the governments of Taiwan and New Zealand to discuss and collaborate on numerous issues of mutual interest, such as intellectual property, labor rights, cooperation on technical standards and regulations, and environmental protection. The chapter on the environment, for example, encourages personnel exchanges through conferences and joint projects. It adds 132 items to the list of environmental goods, including equipment for renewable energy, the reduction of pollution and environmental monitoring.
There are also sections aimed at encouraging film and television co-productions. In addition, the accord establishes points of contact for dispute resolution through dialogue and consultation, while building a firmer system of legal protection for businesses and individuals as they take up the enhanced opportunities for contact.
Of note, the pact is the first free trade agreement for both Taiwan and New Zealand that includes provisions aimed at encouraging more interactions among indigenous peoples of the nations involved. From indigenous literature and media to tourism, the cooperation will draw on the cultural and economic interests of both sides.
In the bigger picture, the conclusion of the deal with New Zealand speaks volumes about Taiwan’s commitment to trade liberalization within the Asia-Pacific region and globally. Many articles in the agreement exceed Taiwan’s commitments under World Trade Organization (WTO) rules, or venture into issues not yet covered by the WTO. This should go a long way toward helping Taiwan’s bid to join the Trans-Pacific Partnership and Regional Comprehensive Economic Partnership, two proposed free trade blocs currently under discussion.
In the meantime, the governments of Taiwan and New Zealand should be congratulated for ANZTEC. In promoting more exchanges and granting greater access to goods and services, the agreement quite literally offers up the best of both worlds to the peoples of the two nations.