McClay said, combined with a separate recent agreement with the UAE, it would mean about half of New Zealand’s exports to the region would be tariff-free from day one. It would deliver duty-free access to 99% of exports over 10 years.
“This is about the potential of what more we can do, and we can see the trade growing quickly, doubling, over a very short period of time. It levels the playing field for Kiwi exporters.”
New Zealand exports about $1.8 billion of dairy to the GCC countries, $260m of red meat, $72 million in horticulture, and $70m in travel and tourism services.
McClay said it would benefit food exporters, particularly dairy and meat, allowing the sectors to grow. It would also benefit services, such as engineering and architecture, saying it had been quite hard to set up business in those countries.
He said Saudi Arabia, in particular, was opening up its economy to make it easier for businesses to set up, and investing in tourism and infrastructure. “So Kiwis will see a lot of opportunities there.”
The council is New Zealand’s eighth largest trading partner, with the UAE and Saudi Arabia the key markets.
The deal comes almost 18 years after talks first began in 2007 only to be put on hold in 2009 amid controversy around New Zealand’s restrictions on live sheep exports.
McClay said the issue of live sheep exports had not been raised at all in the most recent talks, which re-started in 2022 under former Trade Minister Damien O’Connor.
“It hasn’t been raised, it is not a part of the deal. There is no discussion, no commitment so it is off the table, gone and was not part of the conversation.”
The coalition Government is consulting on its intention to reintroduce live animal exporting with more stringent animal welfare conditions.
McClay said the trade deal would give preferential access to primary sector exporters, streamlined Customs processes and included commitments to make it easier for services businesses to enter the markets.
It was also the first GCC agreement in which it had agreed to a clause protecting against discrimination against women under the Convention on the Elimination of All Forms of Discrimination against Women.
The absence of such a clause was criticised by the Council of Trade Unions in the recent separate economic partnership with the United Arab Emirates.
The agreement also included the now common clauses relating to labour standards, climate and a Treaty of Waitangi exception to allow New Zealand to regulate to meet its treaty obligations.
McClay said it had been important to New Zealand to have those elements included.
After the initial talks were abandoned in 2009, attempts to restart talks in 2015 were unsuccessful, but negotiations began again under Labour in 2022.
McClay took over after the 2023 election, and said he met his Saudi minister earlier this year and discussed the need to either get the deal over the line or abandon the talks.
“In that meeting, we agreed we should put a lot of effort into getting it done quickly, or walk away from it because it had been lingering for 17 years.”
Back in 2009, the live ban had resulted in tensions with Saudi Arabia in particular and the then-National Government controversially put $6m into a “demonstration farm” owned by Saudi businessman Hamood Al Ali Khalaf in a failed attempt to get the talks back on track – an agreement criticised by the Auditor-General.
