Sustainable and inclusive trade commitments are now further embedded in two of our trading relationships under new economic declarations.
The two inclusive and sustainable trade declarations, between Inclusive Trade Action Group (ITAG) members (signed 16 July 2023), and between New Zealand and Australia (signed 11 August 2023), mark New Zealand’s continued focus on fostering trade that advances our broader commitment to a net-zero transition and an enabling economy for all communities.
The latter declaration coincides with the release of the refreshed Trade, Environment, and Climate Change Framework and the Trade and Labour Framework. These frameworks replace their 2001 predecessors, laying down the guidelines for future free trade agreements and policy provisions.
There is no understating the importance of trade to the New Zealand economy; two-way trade totalled $197 billion in 2022. Thus, ensuring that this trade delivers prosperity for all communities (including Indigenous peoples and women), enhances living standards, and advances our sustainable transition is a must. The commitments themselves are not new, but the increased focus on them indicates their priority and long-term importance.
Arguably the clearest evidence of this was New Zealand’s legally binding, and enforceable, climate and gender commitments under the New Zealand-European Union free trade agreement (NZ-EU FTA) that was signed 9 July 2023 – prior to the two declarations and frameworks.
ITAG declaration a commitment spanning the globe
The signing of the Inclusive and Sustainable Trade declaration among ITAG members, which includes New Zealand, Canada, Chile, Costa Rica, Ecuador, and Australia (who formally joined after the signing of the declaration), reflects the shared values and commitments held. It reinforces commitments that are grounded in international law and multilateral instruments, for example core International Labour Organisation (ILO) principles, Sustainable Development Goals (SDGs), and the United Nations Framework Convention on Climate Change (UNFCCC).
The declaration is essentially a commitment among ITAG members. It states, at a high level, that members will cooperate, collaborate, share, explore, and promote these inclusive and sustainable commitments. These commitments could include, for example, collaborating on initiatives that promote Indigenous-to-Indigenous trade, sharing policy provisions that boost trade in sustainable goods, or expanding women’s access to international trade opportunities. It might not be legally binding, but it provides a platform for members to work collectively to advance key outcomes.
New Zealand and Australia marked the 40th anniversary of Closer Economic Relations (CER) with a Sustainable and Inclusive Trade Declaration
Forty years on, since the signing of the free trade agreement between New Zealand and Australia in 1982, the CER agreement has fostered $29 billion in two-way trade, which represented 15 percent of New Zealand’s exports in 2022.
The Sustainable and Inclusive Trade Declaration between New Zealand and our Tasman neighbour builds on this long-term relationship. It is the evolution of what has been widely renowned as one of the most effective and open bilateral free trade agreements globally. A priority of the CER was for it to remain dynamic and adaptable to the changing world, and the declaration is a testament to this.
Similar to the ITAG declaration, this declaration recognises and advances the shared principles between New Zealand and Australia, including the international law and multilateral instruments noted above (which are also included in the NZ-EU FTA), as well as other principles recognising Indigenous peoples, women, and climate change. And again, in essence, it is a commitment by both nations to collaborate on, promote, and accelerate all things in regard to these sustainable and inclusive trade commitments.
Is just a commitment to inclusive and sustainable trade enough?
This commitment to inclusive and sustainable trade is set out in the Government’s Trade for All agenda, which was designed to deliver trade policies for all New Zealanders and contributes to addressing global and regional issues of concern, including environmental matters and labour standards.
Time will tell if this commitment to inclusive and sustainable trade is successful, or if it needs to be part of a formal agreement such as the NZ-EU FTA.