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Report urges NZ-led reform of trade system

Report urges NZ-led reform of trade system

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New Zealand needs to step-up and help lead reform of the international trade system, according to a new report.

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The Regional Comprehensive Economic Partnership (RCEP) trade treaty created the world’s biggest free trade area.
Photo: AFP

Law firm Chapman Tripp’s report International Trade 2020 said globalisation was in retreat for the first time since World War II, with rising protectionism and trade tensions made worse by Covid-related supply chain disruptions, which was putting New Zealand exporters at risk.

Report co-author Tracey Epps said recovery was being hampered by the urgent need for reform of the global trading system, which needed to include issues such as climate change.

“I really believe it’s a time when smaller and medium-sized economies like New Zealand can work together in organisations such as the WTO to push for reform – to really shape the direction of the rules to be more inclusive, to take into account environment, climate change, sustainability and the other issues we need to deal with.”

Epps said decades of relative trade stability and growth were gone and it was now a time for hard decisions.

“Countries have a fundamental choice to make: will they take the path of introspection and protectionism as many did when confronted with the Great Depression in the 1930s, or will they cooperate to keep their economies open and take steps to reform international rules and institutions.”

The report said international cooperation to tackle the Covid pandemic had been lacking, geopolitical tensions and distrust meant the prospect of greater protectionism was “deeply concerning”.

It said the recently-signed Regional Comprehensive Economic Partnership (RCEP) trade treaty, creating the world’s biggest free trade area, including New Zealand, would benefit the signatories, but more reform was needed.

“The pandemic should be seen as an opportunity for like-minded countries to find strength in numbers and cooperate to reform the system for a new era.”

Epps said the next few years were likely to be difficult for exporters.

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