New Zealand e-commerce companies stand to benefit from a new digital trade agreement with Chile and Singapore. In January 2020, the 3 countries concluded negotiations on a ‘Digital Economy Partnership Agreement’ (DEPA).
This agreement aims to support digital trade channels and digital economy growth between the countries, and identify new opportunities for international e-commerce businesses. New Zealand online-based companies are empowered to secure new international trade channels with two key partners in Asia and Latin America through increasingly popular digital platforms. We explore what this digital trade agreement means for e-commerce opportunities in the Asia-Pacific region.
What’s in the New Zealand-Chile-Singapore digital trade agreement?
The Digital Economy Partnership Agreement (DEPA) between New Zealand, Chile and Singapore specifically targets the promotion and growth of e-commerce opportunities between these Asia-Pacific countries. The scope covers opportunities for cooperation, challenges and areas to consider for a future of increased trade in the digital era.
E-commerce companies in the signing countries will receive greater support to expand internationally, and provide their products and services to new markets.
According to the New Zealand Ministry of Foreign Affairs and Trade (MFAT), the DEPA digital trade agreement outlines a number of key areas for digital economy development, including:
- Consumer and data protection
- Digital inclusion and inclusive trade
- Adapting to new technologies, and changing trade methods in the digital world
- Treatment of digital products
- Business and consumer trust, and the ‘Wider Trust Environment’
- Small and Medium Enterprises cooperation
- Transparency and dispute settlement
- Government procurement.
Discussing data and consumer protection
Data is a fundamental element of the digital economy and international e-commerce activities. The digital trade agreement mandates participating countries to establish robust legal frameworks to protect privacy and personal information.
Likewise, the sphere of consumer rights must adapt to the online world. Part of the DEPA enforces that participating countries must also present clear guidelines for consumer protection in digital trade.
New and changing payment technology
It is a challenge for governments to keep up with the pace of innovation in e-commerce and other online activities. One key challenge for policy-makers will be building frameworks to cover current and future payment methods and online retail models.
Latin America and Asia are both demonstrating strong uptake of technological innovation, and payment methods between these diverse regions may evolve differently. Popular e-commerce facilities across the 3 countries include digital wallets, secure online payment platforms, and mobile payment options.
Supporting a growing digital economy
Singapore’s Minister for Trade and Industry, Chan Chun Sing, said at the signing ceremony in a Singapore: “As digitalisation changes the face of commerce and trade, we look to build new forms of cross-border linkages and create opportunities for our businesses to thrive in the digital economy.”
The 3 countries aim to discuss opportunities for further digital cooperation that could be applied to wider international e-commerce initiatives.
“We think that this will be a pathfinder agreement that will apply initially to those countries but will expand over time,” said David Parker, New Zealand Minister for Trade and Export Growth in a public release. “Digital trade is constantly evolving. We may not know what new technologies will emerge, but we know it is valuable to have open channels of communication with close partners to discuss issues this change can bring.”
International cooperation on digital trade
The digital trade agreement between New Zealand, Chile and Singapore is designed to complement other international e-commerce initiatives, such as that of the World Trade Organization (WTO).
Additionally, Minister Parker confirmed that the DEPA will also integrate with work underway with APEC (Asia-Pacific Economic Cooperation), and the OECD (Organization for Economic Cooperation and Development).
Next steps to implement the DEPA
This digital trade agreement is not yet in force among the participating countries. MFAT outlines the next steps for New Zealand to fully implement new digital trade policies:
- The government will engage with the public on core areas of the DEPA
- Release of the details of the agreement, and the impacts on New Zealanders and businesses
- The government will decide whether New Zealand will move forward with the DEPA
- New Zealand, Chile and Singapore Ministers sign the DEPA
- New Zealand begins ratifying the digital trade agreement.
What does this digital trade agreement mean for business in New Zealand?
The New Zealand government plans to improve the level of ‘digital inclusion’ in the country, and reduce barriers to digital trade. These barriers could include:
- The changing nature of trade
- Countries’ direct or indirect changes to regulations that impact digital trade, such as cyber security and privacy
- Apprehension from businesses and consumers to trade over the internet due to concerns about security.
With the DEPA, New Zealand places a focus on providing secure platforms and channels for digital trade, and supporting businesses to get involved in e-commerce in various ways.
Improving international online connectivity
New Zealand e-commerce traders now have the opportunity to engage with some of the country’s closest partners in Asia and Latin America. Ongoing attention to reducing barriers will give businesses greater reach into 3 highly active and response markets and an overall consumer population of around 28.4 million.
Although New Zealand is tightly connected with Asian markets, a ‘tyranny of distance’ appears to slow trade activity with Latin America. With reduced barriers to digital trade, New Zealand can pursue stronger commercial connectivity with Chile, with a mind to expand this engagement in the region in the future.
New Zealand places a strong emphasis on supporting and promoting digital economic growth with key partners, including Australia and other APEC members. As a foreign multinational looking for e-commerce expansion opportunities, New Zealand offers highly competitive commercial conditions.
Take advantage of New Zealand’s digital trade agreement with Biz Latin Hub
Take advantage of the New Zealand’s world-class business environment and future-focussed trade policies. To expand into the country, you’ll need to engage with a local legal and accounting expert to ensure you can get started as soon as possible and in full compliance with corporate regulations.
At Biz Latin Hub, our team of local and expatriate professionals provides comprehensive guidance for expanding multinationals entering South Pacific and Latin American markets. Our New Zealand corporate law and accounting specialists provide a suite of market entry and back-office services to enable your long-term commercial success.
Reach out to us here at Biz Latin Hub for customized support for your next business venture.
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