15 Jul 2015

NZ firms welcome foreign govt contract deal

8:55 am on 15 July 2015

New Zealand businesses are welcoming a new trade deal that allows them to bid for government contracts in 43 countries including the United States, Japan and the EU.

From next month New Zealand will become part of the World Trade Organisation's procurement agreement.

National MP, Steven Joyce.

Steven Joyce Photo: RNZ / Alexander Robertson

The agreement has taken two years of negotiations and gives New Zealand businesses access to a government contracts market estimated to be worth $1.7 trillion a year.

Acting trade minister Steven Joyce said it would help achieve the Government's goal of increasing exports to 40 percent of GDP by 2025.

"It affects a whole range of New Zealand businesses, bigger ones like Fisher & Paykel Health Care and Tait, they have had to set up factories in America to meet current criteria, companies won't have to do that now.

"Businesses that have been held back because they can not afford to set up factories abroad can now get into the international market."

Mr Joyce said government advisors would help ensure companies could make the most of the agreement.

"Already Kiwi companies are moving to take part, New Zealand Trade and Enterprise are holding workshops so companies are aware of the new opportunities."

Business New Zealand chief executive Phil O'Reilly said the agreement offered new opportunities.

"This agreement will make the idea of companies bidding for international government bids possible.

"If governments say 'we are not going to deal with a New Zealand business', well now if they are under the agreement they have to open up conversations."

Mr O'Reilly said it would not have a high impact on the domestic market, as overseas companies were already able to bid for government contracts here.

He called it an agreement with no downsides.

"The only negative I can potentially see is if governments that are also signatories to this offshore say they are signatories and don't change their behaviour. But I do not see that happening, this is 99 percent positive for New Zealand businesses."

Orion Healthcare, which sells IT systems to healthcare providers in more than 20 countries, is pleased with the agreement.

Chief operating officer Graeme Wilson said international trade represented 90 percent of its business.

"Some markets that New Zealand hasn't had large exposure to as far as technology goes makes it harder for us to get in.

"Anything that makes some markets operate in a fashion like ones we are already in is a good thing for our business."

Mr Wilson said being able to compete on the international market was great for any business.

New Zealand's accession into the Agreement of Government Procurement comes into effect next month.

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