Trade Minister Todd McClay finalized the deal after eight months of meetings and negotiations.
Photo: RNZ / Samuel Rillstone

In a major breakthrough, New Zealand has finally reached a trade deal with the six Gulf countries, ending a nearly two-decade effort by several governments.

The deal, agreed overnight in Doha, will provide duty-free access to 99 per cent of New Zealand exports over 10 years.

It comes after New Zealand struck a free trade deal with the United Arab Emirates in September – the fastest the country has ever struckin just four months.

With the agreement of the Gulf Cooperation Council (GCC), 51 per cent of New Zealand’s exports to the Middle East region will now be immediately exempt from customs duties upon signing.

From 2007 to 2009, New Zealand and the Gulf Cooperation Council negotiated and largely concluded an FTA, but it was never finalized or signed due to a moratorium on FTAs ​​imposed on the era by the GCC.

It was in March 2022 that the GCC finally agreed to reconnect with New Zealand following a visit by Damien O’Connor, then Minister of Commerce.

Five rounds of meetings, mainly by video conference due to Covid-19, took place between negotiators throughout this year and last year, until elections were held and a change of government and minister.

By the time Todd McClay took office, the first round of in-person negotiations had already taken place and technical working groups had been organized on market access and labor/environment issues.

McClay reached the deal after eight months of meetings and negotiations under his leadership, starting with the World Trade Organization (WTO) ministerial meetings in Abu Dhabi in February. During this period, he visited the region seven times.

One of the ongoing public concerns regarding any deal with the GCC was whether live sheep exports would be demanded, and potentially granted, as part of the negotiations.

Under the government of Sir John Key, then Foreign Secretary Murray McCully gave more than $11 million in cash, livestock and farming equipment to a Saudi livestock importer in an attempt to appease the businessman.which would have blocked any FTA with the Gulf States.

New Zealand at the time banned exports of live sheep on animal welfare grounds, but in an attempt to end the grudge, the government flew 900 pregnant ewes to the Saudi desert, where many of their lambs died immediately.

A report from the auditor general later found no evidence of corruption but strongly criticized the government’s processes and management at the time.

RNZ understands live sheep exports were never discussed with New Zealand negotiators this year and never came to the table.

Speaking to RNZ from Doha, McClay described the deal as “the highest quality deal the GCC has concluded to date and the first with a major agricultural exporter”.

“Successfully securing a trade deal with the GCC has been a long-standing ambition of successive governments for almost two decades,” he said.

New Zealand and GCC trade is worth more than $3 billion a year, with New Zealand exporting $2.6 billion through June 2024. This includes $1.8 billion worth of dairy, $260 million in red meat, $72 million in horticulture and $70 million in travel and tourism services. .

The GCC is made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

Under the FTA, Kiwi businesses will have guaranteed access to central government procurement opportunities. This will be reciprocal for all GCC member countries, except Saudi Arabia, which is not part of the public procurement chapter.

The agreement also:

• Affirms human capital and labor standards through commitments to the International Labor Organization (ILO) Declaration on Social Justice for a Fair Globalization.
• Affirms and honors women’s economic empowerment through commitments to the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW).
• sets climate targets consistent with New Zealand’s international obligations through the General Collaboration Chapter on Sustainable Development, in which New Zealand and the GCC recognize the importance of tackling climate change and the principles of the UNFCCC and the Paris Agreement.
• Retains New Zealand’s right to regulate, including through the Treaty of Waitangi exception.

This is the first trade agreement the GCC has concluded with a Western country that includes commitments to join CEDAW.

Women’s rights in Saudi Arabia have attracted much international attention and concern, often being cited as a reason not to engage with the country on trade issues.

Organizations including the United Nations and the World Bank have noted significant improvements in recent years.

The campaign against male guardianship led to significant progress in 2019 when a royal decree for the first time allowed Saudi women over the age of 21 to register for divorce and marriage, apply for passports and others official documents and traveling abroad without the permission of their guardian.

Trade facts and figures, provided by the Department of Foreign Affairs and Trade.

CCG as a whole

• Two-way business value of $3.06 billion
• Exported for $2.61 billion
• Imported $448.11 million
• If treated as a single country, for total trade in goods and services, this group of countries would rank 7th for highest export value, 28th for highest import value, and 11th for the highest total commercial value.

Bahrain

• Two-way trade value of $76.79 million
• Exported for $60.72 million
• Imported for $16.07 million
• Bahrain ranked 66 out of 242 for highest export value, 84 out of 241 for highest import value, and 80 out of 244 for highest total trade value.

Kuwait

• Total value of bilateral trade of 125.13 million dollars
• Exported for $104.19 million
• Imported for $20.95 million
• Kuwait ranked 52 out of 242 for highest export value, 77 out of 241 for highest import value, and 68 out of 244 for highest total trade value.

Oman

• Two-way trade value of $200.35 million
• Exported for $187.15 million
• Imported $13.2 million
• Oman ranked 45 out of 242 for highest export value, 89 out of 241 for highest import value, and 55 out of 244 for highest total trade value.

Qatar

• Two-way trade value of $105.29 million
• Exported for $74.39 million
• Imported for $30.9 million
• Qatar ranked 59th out of 242 for highest export value, 69th out of 241 for highest import value, and 72nd out of 244 for highest total trade value.

Saudi Arabia

• Two-way business value of $1.28 billion
• Exported for $1.06 billion
• Imported for $215.47 million
• Saudi Arabia ranked 18th out of 242 for highest export value, 40th out of 241 for highest import value, and 23rd out of 244 for highest total trade value.

United Arab Emirates

• Two-way business value of $1.27 billion
• Exported for $1.12 billion
• Imported for $151.52 million
• The UAE ranks 17th out of 242 for highest export value, 45th out of 241 for highest import value, and 25th out of 244 for highest total trade value.