Canada and New Zealand Free Trade Agreement: What You Need to Know
Canada and New Zealand are two countries that share a strong economic relationship, with trade between the two nations reaching over $2 billion CAD in 2020 alone. The Canada-New Zealand relationship has been supported by a free trade agreement (FTA) since 1988, which has led to increased trade, investment and job creation for both countries. Now, the two countries are poised to deepen their economic ties further as they work towards a new and improved FTA.
What is a Free Trade Agreement?
A Free Trade Agreement is a treaty between two or more countries that establishes an agreement to eliminate or reduce trade barriers such as tariffs, quotas, or other restrictions on goods and services. FTAs are designed to boost economic cooperation between countries by facilitating trade, investment, and job creation.
The Current Status of Canada-New Zealand FTA
The current Canada-New Zealand FTA is over 30 years old and, while it has been beneficial for both nations, it is in need of an update. The two countries have negotiated a new trade agreement that will modernize and deepen the existing FTA.
The new agreement will focus on strengthening trade ties, enhancing investment opportunities, and expanding cooperation in areas such as digital trade, the environment, and labor rights. The agreement will also establish a framework for ongoing regulatory cooperation to align regulatory frameworks and reduce trade barriers.
Benefits of the Canada-New Zealand FTA
The Canada-New Zealand FTA will deliver significant benefits for both countries. By reducing tariffs and other barriers, it will help boost trade and investment flows, creating new opportunities for businesses and workers. The new FTA will also provide a stable and predictable trading environment, reducing uncertainty for businesses and investors.
Increased trade between Canada and New Zealand will lead to increased economic growth and job creation in both countries. The agreement will also help to foster greater cooperation between the two nations in key areas such as research and development, innovation, and education.
While negotiations on the Canada-New Zealand FTA have progressed significantly, there are still challenges ahead. One of the main challenges is ensuring that the agreement is aligned with the values and priorities of both nations.
Canada and New Zealand share similar values when it comes to protecting the environment, promoting labor rights, and safeguarding human rights. Ensuring that the new FTA is consistent with these values will be essential to maintaining public support for the agreement.
Another challenge is managing the trade-offs that come with any trade agreement. Some industries may benefit more than others from the Canada-New Zealand FTA, and there may be winners and losers in different sectors. It will be important to manage these trade-offs to ensure that the overall benefits of the agreement are felt across the economy.
The Canada-New Zealand FTA is an important step in deepening economic ties between two nations. The new agreement will modernize and deepen the existing FTA, boosting trade, investment, and job creation in both countries. While there are challenges ahead, the benefits of the Canada-New Zealand FTA are clear and will help to create a more prosperous and sustainable future for both countries.