New Zealand and China announce paths to strengthen trade links
In June, high-ranking New Zealand and Chinese politicians utilised recent exchanges to commit to the strengthening of trade between New Zealand and China.
The visit of Chinese Premier Li Qiang to New Zealand marked a considerable step in the relations between China and New Zealand. Notably, during his visit, it was announced that China would be removing the need for New Zealanders to obtain a visa for travel lasting under 15 days.
While this was occurring, New Zealand trade minister Todd McClay visited the Chinese minister of commerce, Wang Wentao, in Beijing. The two used the occasion to launch negotiations on service trade. The negotiations will tie into the 2022 New Zealand-China Free Trade Agreement Upgrade Protocol, an upgrade to the original 2008 New Zealand-China Free Trade Agreement.
The 2022 Upgrade sought to create pathways to strengthen cooperation on competition policy, e-commerce, government procurement and the impact of trade on the environment. The negotiations launched by the ministers will work towards updating the rules for trade in services.
Minister McClay also commented on China’s recent applications to join CPTPP and the Digital Economy Partnership Agreement (DEPA). The minister reaffirmed that China’s acceptance into the blocs would rest on the collective decisions of the current member States. DEPA was signed in 2020 between New Zealand, Singapore and Chile with the intention of creating a framework for trade rules in the digital economy.
RCEP Update: Chile, Hong Kong and Sri Lanka look to join world’s largest economic bloc
When the Regional Comprehensive Economic Partnership (RCEP) was formed in 2020, it immediately became the largest free trade agreement by population. By 2025, that might expand further with the potential entry of the bloc by Chile, Hong Kong and Sri Lanka.
- Chile – In mid-June, Chile’s undersecretary for international economic relations, Claudia Sanhueza Riveros, submitted the formal letter of application. If successful, Chile would be the first member State from Latin America and the first from outside the Asia-Pacific region.
- Hong Kong – Hong Kong submitted a formal request to join RCEP immediately after it came into force in early 2022. The secretary for commerce and economic development, Algernon Yau, outlined a portion of Hong Kong’s strategy for acceptance, including engaging in meetings with the member States as well as business stakeholders.
- Sri Lanka – The Sri Lankan president, Ranil Wickremesinghe, revealed in 2023 that Sri Lanka’s application earlier that year had been made to strengthen economic links with China, Japan and South Korea. The move forms part of Sri Lanka’s overall pivot to increase trade with East Asia. Sri Lanka has identified the region as having advanced rapidly.
RCEP currently includes New Zealand, Australia, ASEAN, Japan, South Korea and China. New Zealand ratified RCEP in November 2021.
Equatorial Guinea joins ICSID, Honduras takes a step back
The International Centre for Settlement of Investment Disputes (ICSID) has just welcomed Equatorial Guinea as its 166th member. In June, Equatorial Guinea’s ambassador to the United States signed the ICSID Convention with the intention of ensuring strong legal guarantees to foreign investors.
Once Equatorial Guinea ratifies the ICSID Convention, it will be represented in the Administrative Council. This means that Equatorial Guinea will be able to participate in ICSID’s governance, including the approval of rules of procedure for ICSID cases.
In other ICSID news, Honduras has formally announced its decision to leave. In February, Honduras sent the World Bank written notice under Article 71 of the ICSID Convention of its denunciation of the ICSID Convention.
The written notice means that in six months denunciation will occur, releasing Honduras from its obligations to subject itself to ICSID’s dispute resolution mechanics. The World Bank has since upheld its duty under Article 75 to notify all ICSID signatory states, including New Zealand.
Sri Lanka ratifies, and Iraq signs, the Singapore Convention
What is the Singapore Convention?
The United Nations Convention on International Settlement Agreements Resulting from Mediation (the Singapore Convention) entered into force on 12 September 2020. This landmark instrument lays the foundation for effective international trade and commerce across borders, offering a framework for parties to a commercial dispute to enforce and invoke international written settlement agreements resulting from mediation (Article 1). This amicable approach to resolving disputes is consistent with the United Nations Sustainable Development Goal 16 of promoting peaceful and inclusive societies and justice for all.
Since its enactment, the Singapore Convention has received overwhelming global support. As of 3 July 2024, it has 57 signatories and 14 parties, including some of the world’s largest economies, such as the United States of America, China, India and the United Kingdom.
Sri Lanka
On 24 February 2024, Sri Lanka ratified the Singapore Convention after the Sri Lankan Parliament enacted the Recognition and Enforcement of International Settlement Agreements Resulting from Mediation (Act No. 5 of 2024) in January 2024. The Act reflects the general principles of the Singapore Convention and adopts a wide interpretation of commercial consistent with the UNCITRAL Model Law on International Commercial Arbitration.
Iraq
More recently, Iraq signed the Singapore Convention in April 2024. One of Iraq’s main justifications for joining is to maintain trade relations and create a more effective business environment.
New Zealand’s position
Despite being a mediation-friendly jurisdiction, New Zealand has not signed the Singapore Convention. Given its global popularity and the increasing emphasis on using mediation to settle disputes, time will tell whether New Zealand will follow suit.
