Changes are to be made to the rules governing access to the NZECO's trade guarantees.
The first change is to allow NZECO to underwrite its trade guarantees in a broader range of currencies, including China's renminbi. This reflects the reality that New Zealand exporters are increasingly under demand from Chinese buyers to transact directly in the renminbi.
The second change is in relation to NZECO's 30% content rule, which requires that exporters' products have at least 30% New Zealand content to be eligible for a trade guarantee. The change will provide for a wider "benefit to New Zealand test", which takes into account benefits to New Zealand over and above the level of New Zealand value-added content. Thus, under the wider test, to measure New Zealand "economic benefit" NZECO will look at one or more of the value of goods or services provided from New Zealand (either solely or in conjunction with other New Zealand residents), the profit derived from the transaction that will be repatriated back to New Zealand, the level of intellectual property underpinning the transaction, and the potential to further leverage and grow this intellectual property and the potential for growth into countries and industry sectors considered of strategic economic benefit to New Zealand.
If products are oversubscribed, NZECO will continue to prioritise exports with New Zealand value-added content. It is anticipated that the changes will take effect later this month.