Thailand - New Zealand Closer Economic Partnership: TNZCEP
 
    Thailand and New Zealand Closer Economic Partnership (TNZCEP) was signed on April 19, 2005, and came into effect on July 1, 2005. The Agreement covers the liberalization of market access for goods, services, and investment, as well as cooperation in trade-related such as customs procedures, electronic commerce, intellectual property, government procurement, and competition policy. (details)

    Trade in Goods

    In general, since the TNZCEP came into effect, Thailand has benefited from the elimination of duties on 79% of all goods imported into New Zealand, equivalent to 85% of the value of Thai products entering the country, covering such items as pick-up trucks, canned tuna, plastic pellets, preparations from cereals, gems and jewelry, frozen shrimp, electrical appliances, as well as glass and glass products. Tariffs on the remaining categories of imports will be eliminated in 2015. (See the Tariff Schedule for New Zealand)

    At the same time, 54% of all imports from New Zealand, accounting for 49% of the total value of the goods imported, now enter Thailand duty free. Among these products are infant food preparations, wood and wood products, wool, plastic and plastic products, marine animals, paper and paper products, machinery, sugar and sugar-based foods, preparations for consumption such as vitamins and protein, animal feed, fruit, vegetables, and grains. Tariffs will be eliminated by 2010 on a further 10% of imported goods, while sensitive items such as milk and dairy products, beef, and pork, as well as onions and onion seeds, will be gradually eliminated during 2015-2020. (See the Tariff Schedule for Thailand)

    In addition, Thailand removed tariff quotas committed under WTO obligations on 18 of 23 categories of agricultural goods, and offered specific quotas of 10% more than the volume obligated in 2004 under WTO commitments for 3 of the remaining 5 products, i.e., potatoes, onions and onion seeds. However, Thailand retains its quota for non-fat milk, a sensitive product, and will not open its market for the next 20 years. (See Tariff Quota Schedule for Thailand)

    Further to Safeguard Measures in accordance with the WTO to enable domestic industries to adjust if a surge in imports resulting from tariff reductions negatively affects local producers and industries, New Zealand and Thailand have agreed to apply Special Safeguard Measures (SSG) in dealing with sensitive agricultural products during the transition, to ensure that Thai domestic industries will have time to adjust to the impacts of the Agreement. A total of 41 products fall under SSG Measures, including beef, pork, edible organ meats, milk and cream, skim milk, butter, butterfat, cheese, buttermilk, natural honey, Mandarin oranges, fresh grapes, and processed potatoes. SSG Measures may be applied if the volume of imports of such products exceeds the specified 'trigger volume' level for a particular year by increasing the rate of customs duty applicable for that product to the level equal to the current customs duty or to the current 'Most Favored Nation' (MFN) rate, whichever is lower. In addition, Thailand will be able to apply this special safeguard measure temporarily through 2015 and 2020. (See the list of Thai products eligible for Special Safeguard Measures :SSG)

    Rules of Origin

    Exports from Thailand and New Zealand will receive preferential tariff treatment under this Agreement only on goods that meet agreed-upon conditions of the 'country of origin' requirements for each product. The conditions comprise: 1) goods that are composed of completely domestic components (wholly obtained) such as mineral ore, agricultural produce, and products from domestic live animals; or 2) products that have undergone substantial transformation through processing, resulting in a change of tariff classification, and that have a significant regional value content of Thai and New Zealand components (40%-45% of the cost of the product) in their production. (See Country of Origin conditions under the Closer Economic Partnership Agreement)

    Trade in Services and Investment

    The chapter on Trade in Services provides both countries to enter into negotiations on trade in services within three years from the date of entry into force of the Agreement. In the meantime, each country would allow facilitation of travel by nationals of the other country to work and/or conduct business within its borders. New Zealand has agreed to allow Thai chefs certified by the Department of Skill Development of the Thai Ministry of Labor to work in-country under contract up to a period of 3 years with a further 1-year extension. New Zealand businessmen are allowed to apply for multiple entry visas for periods of up to 90 days at Thai Embassies/Consulates abroad to attend meetings and conduct business. New Zealand businessmen are also allowed access to the 'one-stop service center' for various permits and required documentation, a convenience previously limited to businesses with assets valued at more than Bht. 30 million. (See Side Letters regarding Temporary Entry for New Zealand Business People in Thailand and Temporary Entry for Thai Chefs in New Zealand)

    In terms of investment, New Zealand offers opportunities for Thai nationals to invest in all types of businesses with the exception of fisheries, with the condition that investments of over NZ$50 million must first receive approval from the Board of Foreign Investment. The ceiling on foreign investments is to be raised to NZ$ 100 million, which is seen as a further opportunity for Thai investors. Thailand permits New Zealand businessmen to invest in various areas, particularly those being promoted by the government, with a minimum commitment of Bht. 3 million. Such areas include electronic equipment, electrical appliances, software, machinery, paper products, processed foods requiring new technologies, and automobile parts. In addition, both countries agree to promote and protect investment. (See New Zealand's Schedule on Investment and Thailand's Schedule on Investment)

    Cooperation in Trade

    Thailand and New Zealand will cooperate in facilitating trade between the two countries and ensuring productive and flexible approaches in areas such as customs procedures and cooperation, electronic commerce, intellectual property, and competition policy through the exchange of information and the sharing of knowledge through training and seminars.

    In respect to agricultural products, the two countries have set up a Joint SPS Committee to consider matters relating to sanitary and phytosanitary measures, and to explore opportunities for further cooperation. In this effort, New Zealand will undertake the process of pest risk analysis (PRA) and will develop an Import Health Standard (HIS) under its biosecurity regime for Thai agricultural products, namely longan, lychee, mangosteen, ginger and durian, with the aim of completing this process within two years. (See the Side Letter relating to Priority Market Access Interests of Thailand and New Zealand.)

    A Closer Economic Partnership Joint Commission (CEP Joint Commission) has been established to oversee implementation of the Agreement and to review the economic relationship and partnership between the Parties. The CEP Joint Commission will meet annually or as mutually determined by both sides.

  • Thailand-New Zealand Closer Economic Partnership Agreement (TNZCEP)
  • Tariff Schedule-Thailand (Cover Sheet)
  • Tariff Schedule- Thailand
  • Tariff Schedule- New Zealand (Cover Sheet)
  • Tariff Schedule- New Zealand
  • Tariff Quotas- Thailand (Cover Sheet)
  • Tariff Quotas Schedule- Thailand
  • Rules of Origin
  • Special Safeguards- Thailand
  • Investment Schedule- Thailand
  • Investment Schedule- New Zealand
  • Side Letter: Product Priorities for SPS Market Access
  • Side Letter: Temporary Entry for New Zealand Business People in Thailand
  • Side Letter: Temporary Employment for Thai Chefs in New Zealand