New Zealand’s push to build its own club of small and medium trading nations has picked up three new members, with Korea, Peru and Thailand signing on to the Future of Investment and Trade Partnership at a ministerial meeting in Auckland this week. The grouping, known as FIT, now counts 19 countries, up from 16, less than a year after it was launched.
Trade and Investment Minister Todd McClay chaired the meeting and used it to sell the partnership as a practical answer for exporters from smaller economies who feel exposed when the big trading powers turn to tariffs and protection. “The FIT Partnership has grown to 19 members less than a year after launch. That tells you something,” McClay said. “Small and medium sized trading nations want practical ways to improve opportunities for their exporters, and they see FIT delivering that.”
The membership now spans Africa, the Middle East, Asia, Europe, Latin America and the Pacific. Alongside New Zealand it takes in Brunei Darussalam, Chile, Costa Rica, Iceland, Korea, Liechtenstein, Malaysia, Morocco, Norway, Panama, Paraguay, Peru, Rwanda, Singapore, Switzerland, Thailand and the United Arab Emirates, with Uruguay rounding out the list. The Government says more countries are weighing up whether to join.
The pitch rests on a simple idea. These are economies that live or die by trade and cannot throw their weight around the way the United States, China or the European Union can. Rather than wait for a stalled World Trade Organisation to deliver new global rules, they are agreeing to a set of smaller, practical commitments among themselves. “We are a group of countries whose economies are all dependent on trade,” McClay said. “We know the value of simple, consistent trade rules, especially when the global rules are less certain.”
The Auckland meeting produced several concrete outcomes rather than a single big agreement. Thirteen members signed a declaration on economic resilience, promising to work together so that trade keeps flowing when things go wrong and to keep critical infrastructure such as land routes, airports and seaports open during a crisis. A separate declaration on digital trade committed members to cutting paperwork, with pilot projects planned to move commercial trade documents into electronic form so goods are not held up by stacks of paper at the border.
The outcome McClay pushed hardest sits closer to home for New Zealand farmers and growers. He led a new arrangement, backed by eight other countries, aimed at confronting what officials call non-tariff barriers. These are the rules, standards, licensing hoops and testing requirements that do not show up as a headline tariff but can still shut a product out of a market or make it too expensive to bother. For a country that has spent decades chasing free trade deals to drop tariffs, these hidden barriers have become the bigger problem.
“For New Zealand alone, they impact an estimated $9 billion of trade, hitting the primary sector hardest,” McClay said. “As small and medium sized economies, they directly affect whether our exporters can compete in-market.” The framework agreed in Auckland does not force any country to remove a barrier, but it gives members a shared way to raise problems and push each other to take practical steps.
Ministers also agreed to open a new work area on global subsidies, the state support that can distort trade by letting subsidised producers undercut competitors on price. New Zealand, which subsidises its farmers very little, has long argued that heavy subsidies overseas leave its exporters fighting on an uneven field. Officials say the work is meant to complement, not replace, efforts already under way at the World Trade Organisation.
The timing is not an accident. New Zealand exporters have spent the past year absorbing a run of trade shocks, from a United States tariff on New Zealand goods that is set to climb toward 12.5 percent, to broader worries about where the rules-based system is heading. The Government has responded by spreading its bets, opening a trade and investment dialogue with Switzerland, courting India, and now building out FIT as a standing forum where smaller nations can coordinate. “Working with like-minded economies through FIT supports our exporters, strengthens our trading position and grows our economy,” McClay said.
For all the warm words, FIT is a lighter-touch arrangement than a traditional free trade agreement. Its declarations are not legally binding, there is no tariff schedule and no dispute settlement panel to enforce anything. Supporters argue that is the point, that a nimble grouping of willing countries can move faster and try new ideas without the years of negotiation a formal treaty demands. Critics of these looser groupings tend to ask what changes on the ground for an exporter when the commitments cannot be enforced.
What is clear is that trade policy is shaping up as a live issue heading into the 7 November election, with the parties offering different views on how New Zealand should respond to a less predictable world. Voters wanting to compare where the parties stand on trade, the economy and much else can use Newswire’s voting tool to see which policies line up with their own.
You can read the Government’s own account of the meeting on the Ministry of Foreign Affairs and Trade website, which sets out how the partnership is meant to work.
What do you make of New Zealand betting on a club of smaller trading nations rather than the big blocs? Have your say in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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