The business world is welcoming free trade agreement (FTA) negotiations with Russia, saying the deal would be of "enormous future value".Trade Minister Tim Groser yesterday announced that New Zealand and Russia, along with its Customs Union part
The business world is welcoming free trade agreement (FTA) negotiations with Russia, saying the deal would be of "enormous future value".
Trade Minister Tim Groser yesterday announced that New Zealand and Russia, along with its Customs Union partners of Belarus and Kazakhstan, would begin to lay groundwork for formal FTA negotiations.
"Russia has agreed to proceed towards a formal trade agreement with New Zealand, subject to a satisfactory outcome of scoping discussions," he said from Moscow.
The NZ International Business Forum today said the negotiations were an example of New Zealand's innovative trade policy.
"At present New Zealand's economic relationship with Russia and its partners is significantly under-developed. An FTA could enable us to make an early start in developing new trade and investment," executive director Stephen Jacobi said.
"With negotiations currently underway with Korea, India and eight members of the extended Trans Pacific Partnership, our officials have their hands more than full.
"The negotiation with Russia will be no less complex but if handled properly could be of enormous future value for business and the country as a whole."
Export New Zealand executive director Catherine Beard said the FTA could "further opportunities for developing the new face of New Zealand's international trade".
"If New Zealand becomes one of the first countries in the world to negotiate an FTA with Russia, we'll have a strong first-mover advantage in several market sectors," she said.
"Looking towards the future, Russia could be a valuable trade partner for developing Kiwi agri-tech businesses, as well as our service sector -- such as education and tourism."
Wellington Regional Chamber of Commerce also said the FTA could provide a significant boost to the service sector, as well as more traditional exports such as diary.
"As well as food exports there are opportunities in a number of services areas, including ICT (information communication technology), education and tourism and so it is essential that negotiations cover services," chamber chief executive Charles Finny said.
"Russia is the 12th largest economy in the world and is growing fast. Our current trade with Russia is relatively modest, and so there is a strong potential for growth."
Fonterra global trade managing director Kelvin Wickham said Russia was the world's largest importer of butter and cheese and a "significant" market for New Zealand dairy exports -- worth $120 million last year.
"Russia has the potential to become an even more important market for the New Zealand dairy industry and for Fonterra," he said.
Kiwifruit grower Zespri said the FTA would have "significant potential" for New Zealand businesses.
"We are already seeing increased sales and profit as a result of free trade agreements with China and Southeast Asia," director of corporate and grower services Carol Ward said.
Prime Minister John Key also welcomed the negotiations, saying the Russian market had potential for many New Zealand businesses.
"These things can be quite difficult negotiations but I think if NZ can expand it's footprint into Russia then that would be quite interesting," he said.
Labour leader Phil Goff said he was fully supportive of the Government's intent.
"I'm firmly behind New Zealand's position in opening up that market. It's a $200 million market but it could be much bigger," he said.
"We'll be doing everything we can in supporting the Government's initiative in opening that market up for a free trade agreement."
Russia is the world's fifth-largest food import market and is among the world's largest importers of meat and dairy products.
