European Union leaders have talked up the prospects of a free trade agreement, saying it would send a strong political signal as protectionism takes hold elsewhere. They have even suggested it could be completed within three years.

Bill English arrived in Brussels today on his first official overseas trip as Prime Minister.

After meeting English, European Council President Donald Tusk and European Commission President Jean-Claude Juncker said they expected formal negotiations for the long-awaited free trade agreement between the EU and New Zealand to begin soon.

Tusk said it would further strengthen relations and made an apparent reference to the election of US President Donald Trump, the Brexit vote in the UK and the rise of Marine Le Pen's Front National party in the looming presidential elections in France.

"Such an agreement would not only boost sustainable economic growth, investment and job creation on both sides, it would also send a strong political signal of economic openness and trade at a time of protectionist pressures are on the rise not only on our own continent but also round the world."

Juncker also said he was "very eager" to conclude a trade agreement, but pointed to "difficulties" within the EU and globally.

"At least we are hopeful we will be able to make the progress we need. There are remaining difficulties, but we will solve these problems, like others, because New Zealand is a very strong ally of the European Union and we want to continue in that vein.

Despite that, Juncker was optimistic a New Zealand-EU deal could be finalised in three years - half the time it usually took and less than a third of the 10 years it took for Canada. He said it usually took between 5-10 years.

"But I do think two or three years would be enough because we have very similar situations. We are friends, we are allies. We know each other and I think this could be done in a shorter period of time than it is usually done."

English said there was agreement to start negotiations as soon as possible. He noted New Zealand and the EU had signed a agreement as a precursor to a trade deal last year. It takes effect tomorrow.

"I thank the President [Juncker] for his leadership and for the Commission's clear willingness to remain open for business on trade agreements despite some of the political challenges that go with it."

He said the EU was the second largest economic entity and New Zealand's third largest trading partner, so it was important to a small country that relied on trade.

"It is my expectation we should be able to promptly conclude a trading agreement that opens up opportunities for our businesses, small and large, and underscores our shared values."

New Zealand is one of only six World Trade Organisation countries that does not yet have a trade agreement with the 28 member states of the EU, but recent agreements have been bogged down.

It took Canada 10 years of talks and was nearly derailed after a member state objected. The European Court of Justice is also soon to rule on whether member states' Parliaments need to ratify the Singapore agreement - a process that would delay and possibily derail some agreements.

Brexit

English made it clear New Zealand would not take sides as Britain prepared to leave the EU, saying both were important to New Zealand.

"I strongly reaffirmed New Zealand's commitment to continue working constructively with the EU and the UK throughout this process. I noted the importance that both sides closely engage with third parties, like New Zealand, as the process evolved to minimise uncertainty."

When English was asked whether he thought New Zealand would get a better deal with the UK if it split completely from the single market of the EU, Juncker replied promptly with a "no" - drawing laughter.

English said New Zealand had a longstanding relationship with the UK and was ready to negotiate with them when the time came.

Refugees

However, Tusk also signalled New Zealand should do more to help with the refugee crisis, saying it was a "global responsibility".

"The EU will continue to work together with its partners, including New Zealand, in... } } }Continue to full article

REUTERS STR NewIn just a few decades, Vietnam has undergone a dramatic transformation, from an agrarian society to one that has embraced the modern era. Its youthful population and growing middle class have helped drive solid growth—and opportunities for many global investors. This up-and-coming market hasn’t fully embraced capitalism—it remains a Communist state—but it has managed to achieve an interesting balance. There has been a bit of buzz about Vietnam among investors in the past few years, but given the election of Donald Trump as the next US president, the Trans Pacific Partnership TPP , of which Vietnam would have been a key beneficiary, seems even less likely to move forward. However, new trade deals are in the works—including the Regional Comprehensive Economic Partnership RCEP , which Vietnam has joined along with nine other members of the Association of Southeast Asian Nations as well as Australia, China, India, Japan, Republic of Korea and New Zealand. And, there could be new, bi-lateral trade deals in the future.

Nevertheless, I believe Vietnam remains an attractive destination for both investors and tourists, and we think its future looks bright. I recently had the opportunity to visit Vietnam and see the latest wave of changes taking place.

Vietnam has seen strong economic growth, with gross domestic product GDP growth averaging just shy of 7 from 2000–2015.1  This economic boom has also boosted consumer buying power. In 1990, gross national income GNI per capita was US 910, but by 2015, it had risen to 5,690.2  During my recent trip to Vietnam, I found tremendous opportunities in the consumer sector as a result of this rise in income levels.

For example, we visited a dairy company and learned that while per-capita milk consumption in the United States has been above 100 liters per person per year, and in China it was 30 liters, in Vietnam it was only 16 liters. However, that number has been growing very quickly, and it’s no wonder the milk company we visited in Vietnam has seen profit growth every year for the last five years. The company produces fresh raw milk from local cows as well as reconstituted milk from powder, condensed milk, baby formula and yogurt. The company exports its products not only to its neighbors in Asia but also to some markets in the Middle East.

Many companies in Vietnam are government-majority owned, but privatization is expanding with plans to publicly list shares of a number of companies in the future. Some will initially be listed on the Ho Chi Minh Stock Exchange’s secondary exchange, the UPCoM, which has less stringent disclosure requirements, but we think eventually many companies will likely be required to list on the main board and institute broader disclosure. We believe the sale of some state-owned enterprises should help lower Vietnam’s rising national debt, but foreign direct investments are strong, and industry and exports are doing well. As services including tourism represent more than 40 of Vietnam’s GDP, it is the area we are most interested in.3

Phu Quoc Island

To study Vietnam’s tourist industry, my colleagues and I flew down to Phu Quoc Island off the coast of southern Vietnam. We landed at a new, modern airport capable of handling a growing influx of both local and foreign tourists. Local tourists can fly from Ho Chi Minh City for the equivalent of only US 30 to US 50 one way on Vietnam’s low-cost airline. While travel regulations can be tricky and ever-changing, today, foreign tourists can stay between 15 to 30 days without a visa in Phu Quoc, which is a unique concession not available for visitors to other parts of Vietnam.

During our stay, we drove and cycled from one end of the island to the other and found a construction boom under way with new hotels, apartments, villas and a spectacular cableway under construction linking the island with other smaller islands. Phu Quoc itself is a large island 574 square kilometers compared with Singapore’s 719 , and Vietnam’s government has designated it for tourist development.

REUTERS STR NewWe drove to our hotel on a new four-lane highway, and as we toured the island we saw construction of a new north-south four-lane highway under way as well. The government has spent over US 1 billion thus far for infrastructure on the island, including more than US 700 million on the airport where we arrived. According to regional news reports, through summer of 2016, the government had approved and licensed more than 160 projects involving a total investment of more than US 6 billion.

As a microcosm of the country as a whole, Phu Quoc has seen quite a transformation when we consider its history as a place of refuge. The island was also once a prison camp used during various regimes, from the French colonial period through the Vietnam War. One of the tourist attractions is a prison camp museum, complete with barbed wire, guard towers, and models of guard soldiers and prisoners. The island is also famous for its fish sauce and for peppercorns; which we saw growing on vines around the island.

Tourism is transforming the island’s economy, which had previously subsisted on fishing and the aforementioned peppers and fish sauce. A major Vietnamese developer constructed a huge complex at the northern part of the island, including 1,000 hotel rooms, 1,000 villas, a safari park apparently one of the world’s largest , a water park and an amusement park featuring many types of roller coasters and other stomach-churning rides. There is also a 27-hole golf course, an international hospital and facilities for what could become a major casino.

Another developer is building a complex on the southern part of the island, which includes a spectacular cable car that crosses the sea to neighboring islands. We also saw other new hotels being built along the beach.

A pearl farm has also been introduced, so we saw a number of shops promoting the local pearls. Touring the villages around the island we noticed there was still a dire need for better roads and facilities. The influx of tourists and construction of high-end facilities to accommodate them have brought good-paying, steady jobs to many locals who had been suffering a low standard of living before.

For example, one of the Vietnamese cooks at our hotel told us that he had been a fisherman, but now he was doing better financially. As a fisherman, he said life was dangerous and uncertain because he never knew if he could catch enough fish to earn a living. Now, with his wife also working, they are living a better life.

While some may criticize development in naturally beautiful places like Phu Quoc, it’s important to look at the issue from many angles. For the 100,000 natives on the island, prospects are now brighter. Hopefully, development in Vietnam and elsewhere can come with the right intentions and the right balance of interests. With their kind, hospitable nature and happy dispositions, the residents of Phu Quoc, in my view, will make their island a tourism success. We are excited about the potential for further growth and transformation in Vietnam.

Mark Mobius’s comments, opinions and analyses are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Because market and economic conditions are subject to rapid change, comments, opinions and analyses are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy.

Important Legal Information

All investments involve risks, including the possible loss of principal. Investments in foreign securities involve special risks including currency fluctuations, economic instability and political developments. Investments in emerging markets, of which frontier markets are a subset, involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Because these frameworks are typically even less developed in frontier markets, as well as various factors including the increased potential for extreme price volatility, illiquidity, trade barriers and exchange controls, the risks associated with emerging markets are magnified in frontier markets. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions.

______________________________________

1. Source: IMF World Economic Outlook database, October 2016.

2. Source: World Bank, data as of 2015. GNI per capita is expressed in purchasing power parity dollars to adjust for price level differences across countries.

3. Source: CIA World Factbook, data as of 2015.NOW WATCH: Here's what happens to your body when you stop eating sugar

|  An iStackr release  |  January 9, 2017  |

Britain should secure trade agreements with former colonies ahead of Brexit, MPs argue.  On Politico By Esther King

The U.K. should reject the customs union and embrace trade with Commonwealth countries post-Brexit, according to a report by the Free Enterprise Group of Tory lawmakers released Tuesday.

Brexit is an opportunity to return to the U.K.’s “free trading principles” and pursue an agenda of “independent, worldwide trade liberalization and tariff elimination,” according to the report, which is co-authored by Conservative MP James Cleverly and Royal Commonwealth Society policy director Tim Hewish.

The Free Enterprise Group also includes Brexit hardliners such as Andrea Leadsom, secretary of state for environment, food and rural affairs, and Conservative members of Parliament Priti Patel and Jacob Rees-Mogg.

Britain, the group’s report said, had neglected the Commonwealth in trading terms and should consider “the benefit of trading with nations that share a common language and culture.”

The Commonwealth’s share of global GDP overtook the EU’s in 2004 and the gap is set to grow post-Brexit, according to data cited in the report.

While trade with Commonwealth countries accounts for only 8 percent of U.K. exports, Britain is the largest export destination for Australia, Canada, India, New Zealand and South Africa. This provides a strong incentive for these countries to form trade deals with the U.K., the report argued.

Trade deals will have to go hand in hand with liberal visa reform for skilled migrants from the Commonwealth, the report added.

As a first step, the U.K. should secure free trade agreements with Australia, Canada, Singapore and New Zealand in time for Brexit, the report said. It also urged Britain to start negotiations with India and with African, Caribbean and Pacific countries to “mirror or better existing EU options.”

As the world’s second largest service economy, the U.K. should also join the Trade in Service Agreement (TiSA) initiated by the U.S. and Australia.

The Commonwealth market, which includes 2.3 billion people, is “too big an opportunity to ignore,” said Cleverly.

LSE professor and former Business Secretary Vince Cable has argued that Britain’s current ministers have not taken on board that the attempted EU-India agreement foundered not because of the rest of the EU but in substantial part because Britain rejected it.

|  A Politico release  |  January 10, 2017  |

A New Zealand based leading multinational dairy company -- Fonterra Co-operative Group Limited has expressed their interest to invest in the country's dairy sector, a high official of concern ministry said.

Fisheries and Livestock minister during his visit to New Zealand last year got the proposal from Fonterra for investment in the country's dairy sector.

To this effect, top officials of Fonterra visited Dhaka last month and submitted a proposal in this regard to the government requesting to arrange a government to government meeting (G to G) between Bangladesh and the New Zealand.

Board Director of Fonterra Co-operative Group Limited John Monaghan led the delegation.

Fonterra Co-operative Group Limited owned by 13000 New Zealand dairy farmers and the world's largest exporter of dairy products.

"During the visit, the Fonterra delegation had discussed the investment proposal with the fisheries and livestock minister Muhammed Sayedul Hoque," an official of the ministry, who is involved with the process told the New Nation preferring anonymity.

"They are highly satisfied with the investment potential in the dairy sector of Bangladesh," the official said.  "The Fonterra has already sent a proposal to invest in Bangladesh's dairy sector considering its potential. If everything goes accordingly then the investment of Fonterra would reshape the landscape of local dairy sector," he added.

He said that the Fonterra officials have asked the ministry to arrange a meeting between Bangladesh and New Zealand governments for a detailed discussion on finalising the investment proposal.

However, according to the high official of the ministry, the government has started the process of finalising investment proposal from New Zealand's dairy giant.

As part of the process, the ministry of fisheries and livestock (MoFL) sent a letter to the Economic Relations Division (ERD) to arrange a government-level discussion between Bangladesh and New Zealand to expedite the investment in the local diary industry.

"We have sent a letter to the ERD requesting them to arrange discussion between Bangladesh and New Zealand for finalising the investment proposal," another senior ministry official said.

Meanwhile, trade between Bangladesh and New Zealand is undergoing a healthy growth, though the trade balance is largely tilted toward Wellington. Bangladesh enjoys duty-free market access to New Zealand.

Bangladesh's major exports to New Zealand are woven garments, which constitute 66.9 per cent of total shipment, while woolen garments represent 20.8 per cent, jute products 6.8 per cent, hats 2.5 per cent and miscellaneous garment accessories 1.4 per cent.

New Zealand's main exports to Bangladesh are milk powder, which is 90 per cent of the total shipment, while electrical equipment constitutes 2.9 per cent and waste steel 2.0 per cent and fruits 1.4 per cent.

Bangladesh exported goods worth US$ 40.90 million to New Zealand between June 2014 and April 2015, which was $ 40.65 million during the fiscal year 2013-14, according to the Export Promotion Bureau (EPB).

Fonterra is a global, co-operatively-owned company with its roots firmly planted in New Zealand.  It accounts for more than 25 per cent of New Zealand's export.  It employs 16,000 people in New Zealand and elsewhere in the world working to make dairy available to millions of consumers in 140 countries every day.

Fonterra produces more than two million tonnes of dairy ingredients, specialty ingredients and consumer products each year.  About 95 per cent of these are exported to a world wanting more and more of the nutritional benefits we offer.

The company has 30 manufacturing sites across the country and processes about 16 billion litres of New Zealand's farmers' milk each year. It has operates in more than 100 countries across the world.

|  A NewNation release  |  January 10, 2017  |

A new paper backed by former Australian prime minister Tony Abbott is calling on the UK to quit the EU's customs union and focus on Commonwealth trade after Brexit.

The report, authored by Tory Braintree MP James Cleverly, suggests a five step approach to Britain's trade priorities, beginning with the Commonwealth’s open economies.

After setting up “easy win” deals with Australia, Canada, Singapore and New Zealand in time for Brexit in 2019, the UK should pivot to negotiations with India, before deals with the Commonwealth nations of Africa, the Caribbean and the Pacific.

Finally, Cleverly said the UK should join the Trade in Service Agreement, a US-EU-Australian deal with is geared towards services.

|  A CityAM release  |  January 10, 2017

Trade talks at risk because of European sensitivities on agriculture, a populist Kiwi lawmaker says.

Trade talks between New Zealand and Europe risk being shot down by national or regional parliaments in the EU and should be shelved to prioritize a deal with the U.K., a populist Kiwi lawmaker has said.

Ahead of Tuesday’s meeting in Brussels between New Zealand Prime Minister Bill English and European Commission President Jean-Claude Juncker, who are expected to discuss bilateral trade negotiations that could start in the upcoming months, trade spokesperson Fletcher Tabuteau from the populist New Zealand First party warned of “deep trouble” due to European sensitivities on agriculture.

“Given the all-powerful European farmer lobby likes New Zealand like a hole in the back of the head, our deal with the EU isn’t going to go very far, very fast,” said Tabuteau, whose party, although holding only 10 percent of the seats in Wellington’s parliament, is considered an influential kingmaker in national politics.

“The Irish, Polish and French, even the Germans have concerns about allowing [New Zealand] dairy into their free-trade deals,” Tabuteau continued, referring to a recent opinion by the European Court of Justice’s advocate general suggesting that EU trade deals need to be ratified by some 38 national and regional parliaments across the bloc. The court is likely to confirm this opinion in the coming months, which would increase the possibility of future trade deals being vetoed.

“We need to face facts and put our energies into a more likely trade deal with the United Kingdom” after its separation from the EU, Tabuteau said.

|  A Politico release  |  January 9, 2017  |

More local businesses looking to expand into Korea will benefit from the latest round of tariff reductions under the New Zealand-Korea Free Trade Agreement, Trade Minister Todd McClay says.

The start of 2017 saw two thirds of New Zealand’s exports to Korea become duty free, up from 46 per cent in 2016.

“Thanks to this continued progress under the FTA, even more New Zealand businesses can compete favourably in the Korean market,” Mr McClay says.

New Zealand and Korea celebrated the first anniversary of the agreement in December 2016. Since the FTA’s entry into force in December 2015, New Zealand has experienced strong results particularly in the food and beverage sector where exports to Korea have increased by over 16%.

“Korea is New Zealand’s 6th largest goods export market, worth NZ$1.5 billion in the year ending September 2016, but this isn’t just about productive businesses wanting to sell into Korea,” Mr McClay says.

“The FTA also gives New Zealand consumers better access to high quality Korean goods like electronics, cars and machinery.”

Fifteen years after the FTA’s entry into force, 97.8 per cent of New Zealand’s total current exports to Korea will enter duty and quota free.

“New Zealanders are benefiting from the Government’s positive, outward looking relationship with our global partners, and this includes constantly progressing more Free Trade Agreements,” Mr McClay says.

“Tomorrow I will accompany the Prime Minister’s delegation to Brussels and look forward to discussing further trade opportunities with the European Union with my Ministerial counterparts.”

Mr McClay will meet with European Union Trade Commissioner Cecilia Malmström and Christian Cardona, Malta’s Minister for the Economy, Investment and Small Business. Malta currently holds the Presidency of the Council of the European Union.

Further Information on trade progress with Korea:

• Meat, dairy, fruit and seafood exports have all enjoyed growth of over 20 per cent.
• The value of New Zealand’s Kiwifruit exports to Korea grew nearly twenty per cent in 2016 with further progress expected as the 30 per cent tariff on Kiwifruit has now reduced to 22.5 per cent (half of what exporters were paying before the FTA).
• While New Zealand is ranked as Korea’s 10th-largest wine importer, we are emerging as a source of high quality wine among early adopters in the market. The NZ$2.7 million in New Zealand wine sales to Korea in 2015 represented an 18 per cent increase from a year earlier. Following the removal of tariffs at the end of 2015, New Zealand wine exports increased a further 29 per cent in the first half of 2016 compared to a year earlier.
• Exports of processed deer velvet have also increased by over 80 per cent.
• From 1 January 2017, the list of products that can be exported duty free will expand to include products such as frozen fish fillets, prepared or preserved frozen potatoes, asparagus, methanol, and skin care cosmetics.

The start of 2017 saw two thirds of New Zealand’s exports to Korea become duty free, up from 46% in 2016.

Trade Minister Todd McClay says more local food businesses looking to expand into Korea will benefit from the latest round of tariff reductions under the New Zealand-Korea Free Trade Agreement, signed December 2015.

New Zealand has experienced strong results particularly in the food and beverage sector where exports to Korea have increased by over 16%. Korea is New Zealand’s 6th largest goods export market, worth NZ$1.5 billion in the year ending September 2016. Meat, dairy, fruit and seafood exports have all enjoyed growth of over 20%.

The value of New Zealand’s Kiwifruit exports to Korea grew nearly 20% in 2016 with further progress expected as the 30% tariff on Kiwifruit has now reduced to 22.5% per cent (half of what exporters were paying before the FTA). While New Zealand is ranked as Korea’s 10th-largest wine importer, we are emerging as a source of high quality wine among early adopters in the market.

The $2.7 million in New Zealand wine sales to Korea in 2015 represented an 18% increase from a year earlier. Following the removal of tariffs at the end of 2015, New Zealand wine exports increased a further 29% in the first half of 2016 compared to a year earlier. Exports of processed deer velvet have also increased by over 80%. From 1 January 2017, the list of products that can be exported duty free will expand to include products such as frozen fish fillets, prepared or preserved frozen potatoes and asparagus.

|  RuralNews  |  January 9, 2017  |

Prime Minister Bill English will travel to Brussels, London and Berlin next week to meet with leaders to discuss issues including trade and security.

“This is an opportunity to exchange views on a range of issues facing Europe and the world, and to reaffirm that New Zealand remains a committed friend and partner,” Mr English says.

“The focus of my trip will be to advance New Zealand business and trade opportunities in the region, including starting the negotiations on an FTA with the European Union this year.”

In Brussels, Mr English will meet with the three Presidents of the EU – European Council President Donald Tusk, European Commission President Jean-Claude Juncker and European Parliament President Martin Schulz. He will also meet with Belgium’s Prime Minister Charles Michel.

In London, Mr English will meet with Prime Minister Theresa May and Mayor Sadiq Khan.

“I will be interested to hear Prime Minister May’s views on Brexit and will take the opportunity to reaffirm New Zealand’s commitment to working towards a high quality trade deal when the UK is in a position to negotiate.”

In Berlin, Mr English will meet with German Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble.

Mr English will also meet with a range of other government, business and academic leaders to hear their views on the political, economic and security situation in the region and about opportunities for New Zealand there.

The Prime Minister will be accompanied by Trade Minister Todd McClay in Brussels and Foreign Minister Murray McCully in London and Berlin.

Dr Mary English will also travel with the Prime Minister.

Mr English will leave New Zealand on 9 January and return on 18 January.

The World Trade Organisation has upheld New Zealand's challenge to 18 agricultural non-tariff barriers imposed by Indonesia.

New Zealand and the United States jointly brought the case against Indonesia in 2013 over a range of barriers imposed on agricultural imports since 2011.

They included import prohibitions, use and sale restrictions, restrictive licence terms and a domestic purchase requirement.

Trade Minister Todd McClay says they've cost the New Zealand beef sector alone between half a billion and a billion dollars.

"This is an important result for New Zealand's agricultural exporters, and for trade fairness," he said on Friday.

"As a result of this process, we have already seen some improvements to Indonesia's regulations and gains for New Zealand exporters - these will only improve following implementation of the WTO decision."

Mr McClay has given an assurance that New Zealand still has a very strong relationship with Indonesia.

"Even close friends have occasional disagreements, and the WTO helps insulate trade policy differences from wider bilateral relations."