New Zealand seeks to ratify GCC free trade deal

New Zealand is pressing to finalise a stalled free trade agreement with the six-nation Gulf Cooperation Council (GCC) that includes two of the Middle East’s largest economies, Saudi Arabia and the United Arab Emirates. Trade Minister Todd McClay visited the UAE and Kuwait this week in an effort to promote the deal with the GCC, Wellington’s sixth largest trading partner.

New Zealand wrapped up talks on the trade pact in 2009 but it has never been ratified. “There is still some work to do but I’m optimistic we can make some pretty good progress in the course of this year,” McClay told Reuters in an interview at the New Zealand Consulate in Dubai on Tuesday.

Two-way trade between New Zealand and the GCC is worth around NZ$3 billion (US$2.16 billion) annually. New Zealand’s main exports to the region include dairy produce, sheep meat and wood, key components in the Pacific nation’s export basket.

McClay’s regional visit follows a meeting with his Saudi counterpart Majid Bin Abdullah Al Qasabi last September when both ministers agreed to complete the deal. “The time is right to take those last steps to create the framework that will help business and trade grow between the GCC and New Zealand,” he explained.

The Gulf States are undergoing a period of economic reform following more than two years of low global oil prices that have forced a tightening of regional budgets. According to the New Zealand minister, the pressure of low oil prices and other changes in the global economy had prompted the Gulf countries to rethink their policies on foreign trade and to rely less on petrochemicals for their revenue.