logo logo

NZ closer to Middle East trade deal

New Zealand Heral | Monday Aug 24, 2009

NZ closer to Middle East trade deal

By Tamsyn Parker

Plans to further relations between New Zealand and the Middle East are on track and a trade agreement looks close to being finalised next year, one business expert says.

Michael Vukcevic, executive director of strategic growth markets at accountancy firm Ernst & Young and chairman of the New Zealand Middle-East Business Council, says New Zealand has finished its fifth round of talks with the United Arab Emirates and he is hopeful the next round, expected to begin in October, will see a deal done by early next year.

"That would put New Zealand ahead of Australia and Europe which has been trying to sign a free-trade agreement for 30 years.

Vukcevic says the Middle East sees a lot of value in New Zealand and the emirates also like the way Kiwis do business.

"We do what they don’t do. They are oil rich but lacking in agriculture and dairy. We have got lots of food."

He said the free-trade agreement would allow New Zealand companies to gain access to Government contracts.

"Being able to compete as a local company is going to be huge for New Zealand companies."

It will also open up the investment potential for wealthy investors in the Middle East to plough money into New Zealand businesses.

New Zealand has seen interest in Auckland Airport through Dubai Aerospace making a bid for Auckland Airport in 2007 for $2.5 billion.

That deal fell over after negative comments from politicians and a public backlash about foreigners owning a key piece of New Zealand infrastructure.

"We did ourselves no favours with the way we handled that."

Vukcevic describes it as a blip in our relationship but says that seems to be recovering.

"There is still significant interest in investing here."

While Dubai has taken a pummelling on its real estate assets Vukcevic says Abu Dhabi and Qatar remain wealthy because of oil resources.

New Zealand is providing guidance to Abu Dhabi on governance issues and Vukcevic says many ex-pat Kiwis hold strategic roles in the region.

Kiwi Greg Sang is known for his project direction in building the world’s tallest tower the Burj Dubai.

And the council has recently done a deal with corporate travel agency Gilpin Travel to enable businesses to get there for less.

Vukcevic says Kiwi businesses in the past have not done well in expanding offshore: "They make too many assumptions - and think it will be easier and take less time to get established."

The market

Middle East and North African countries include Saudi Arabia, United Arab Emirates, Oman, Iran, Egypt, Syria, Turkey, Morocco, Jordan, Qatar, Israel.

New Zealand exports more than $1.8 billion in goods a year to the region.

Seventh largest trading partner for New Zealand.

 source: NZ Herald