Maximising the potential of ANZTEC
It has been a year since we marked the 10th anniversary of the Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu on Economic Cooperation (the ANZTEC) with a seminar jointly organised by BERL and the Chung Hua Institution for Economic Research (CIER) that explored its achievements and prospects.
Topics covered included the benefits and challenges of the ANZTEC, the role of the world-leading indigenous chapter, the potential for cooperation on climate change and renewable energy, and the future directions for the ANZTEC and beyond.
The ANZTEC was a landmark agreement that eliminated tariffs on nearly all goods traded between New Zealand and Taiwan. Tariff removal on kiwifruit, apples, cherries, dairy products, and meat has led to substantial increases in the value of these exports. Since its implementation, the total trade volume has nearly doubled from $1.6 billion in 2013 (across $870k in exports and $701k in imports) to $3 billion in 2023 ($1.6 billion in exports and $1.4 billion in imports).
These impressive results haves provided a platform for further growth and expansion of the ANZTEC, and focusing on areas where the ANZTEC can be further maximised to realise its full potential. The areas of unrealised potential we identified in 2023 included:
- Student mobility and education partnerships: The ANZTEC had not facilitated increased student mobility between New Zealand and Taiwan from 2013 to 2022. There are significant opportunities to improve education partnerships and student mobility.
- Environmental commitments: Both New Zealand and Taiwan released emissions reduction plans in 2022. There is potential to advance mutual interests and commitments through collaborative efforts in sustainable energy sectors, particularly geothermal.
- Indigenous cooperation: The ANZTEC includes a chapter on Indigenous cooperation, recognising the historical connections between Māori and the Indigenous people of Taiwan. There is an opportunity to expand indigenous-to-indigenous cooperation and make economic and trade opportunities more accessible, particularly for the small-medium businesses that make up indigenous economies in both countries.
- Digital trade: The rapid adoption of technology presents opportunities for New Zealand and Taiwan to leverage each other’s strengths in the technology sector. Taiwan is a leader in semiconductor manufacturing and ICT is New Zealand’s 3rd largest export. In addition to enhancing e-commerce processes and regulations, there are substantial bilateral business opportunities in the technology sector between New Zealand and Taiwan. Both countries can capitalise on their complementary strengths by engaging in joint ventures, collaborative research, and leveraging each other’s expertise. This collaboration can drive innovation and growth within the technology sector. Improved digital trade can also facilitate more inclusive trade.
- Space industry: Both New Zealand and Taiwan have made significant strides in the space industry. New Zealand is now the 4th biggest player in the space industry, and Taiwan has a successful satellite development programme and is a key supplier for global space missions. The partnership can build on this momentum to further develop the space industry in both countries, leveraging New Zealand's advantageous launch location and Taiwan's expertise in high-value manufacturing.
The current government aims to double the value of exports within the next ten years, including maximising the value of existing free trade agreements in a concerted effort to enhance New Zealand’s international trade and economic growth. This would boost our economic growth, create more jobs, and enhance our living standards. The use of the word ‘value’ is a key point: doubling the volume of our exports could put pressure on our natural resources and environment, whereas doubling value can be achieved by focusing on quality, innovation, and sustainability.
New Zealand’s economy has been heavily reliant on physical exports, particularly in sectors like agriculture and forestry. While these industries have been the backbone of the nation’s trade, this overreliance poses risks, especially in a rapidly changing global market. The ANZTEC presents a significant yet underutilised opportunity, and by fully leveraging the potential of the ANZTEC, New Zealand can tap into Taiwan’s technology and innovation sectors, harnessing new avenues for growth. However, achieving these ambitious export targets requires bold investment and a commitment to exploring these new opportunities. This is an opportunity that New Zealand should not ignore: it will enable us to embrace the full potential of digital and technological trade.