Luxon’s Singapore agreement: The trade move to safeguard fuel and food – Fran O’Sullivan
Christopher Luxon’s Government is putting its distinct imprint on New Zealand’s trade strategy, one that treats economic security as seriously as market access.
This will come into sharp focus when Luxon travels to Singapore in early May for top-level talks with his prime ministerial counterpart Lawrence Wong, the launch of the inaugural Singapore New Zealand Leadership Forum and the first steps in a strategy to triangulate the Singapore, New Zealand, Australia relationship.
The evolving economic security architecture owes far more to Covid-era improvisation and the current fuel crisis than to traditional trade diplomacy.
The most obvious demonstration is a novel agreement with Singapore under which the city-state commits to continue supplying fuel to New Zealand in return for continued food exports.
According to a senior official, it is possibly unique in the world: two countries voluntarily waiving their rights to impose export restrictions on each other in a crisis.
The Agreement on Trade in Essential Supplies will be incorporated into the existing bilateral free trade deal between New Zealand and Singapore and signed during the Luxon visit – although both sides are treating it as if it is already in force as the region grapples with the fallout from the Middle East fuel crisis that threatens economic recoveries here and elsewhere.
Luxon forged a close relationship with Wong before they became prime ministers. They talk a similar language, share a faith in master-planning and a managerial approach to government that is appreciated far more in Singapore than here. Pity.
Luxon put Singapore at the centre of his initial foray into Asean nations as Prime Minister. Wong visited Auckland late last year and dined at Luxon’s home.
The backstory is that in the face of global supply chain disruptions caused by the Covid-19 pandemic, New Zealand and Singapore entered into a non-binding Joint Declaration in April 2020 to maintain supply chain continuity and ensure tariffs and other trade barriers were not imposed on essential goods. In April 2022, the Singapore–New Zealand Supply Chain Working Group (SCWG) was announced by the prime ministers of Singapore and New Zealand. Their negotiations concluded last October.
The resultant agreement does three key things.
It identifies critical products each side most fears running short of in a crisis. New Zealand has listed fuel, medical supplies and key industrial inputs such as polymers. Singapore’s list includes food staples – seafood, chicken, dairy and more.
It also sets up crisis contact points. If one side experiences a supply chain disruption, it can formally trigger the agreement. The other Government must help locate commercial suppliers but without controlling prices.
Both sides waive the right to impose export restrictions on those products in an emergency. Under World Trade Organisation rules and most free trade agreements, countries can suspend obligations and block exports to protect domestic needs.
Under this deal, Wellington cannot do that to Singapore – and Singapore cannot do it to New Zealand.
Officials say they are unaware of any other agreement in which both parties have given up that emergency “escape hatch” on a defined list of goods.
The origins lie in the early days of Covid-19, when New Zealand scrambled for PPE and rapid antigen tests and found few willing partners. Singapore was a notable exception.
Evolving that political statement into a binding, product‑specific agreement, however, faced domestic scepticism in both capitals: another highly technical trade instrument for a crisis many preferred to believe was behind them.
This is where Luxon’s role has mattered.
Despite resistance and competing policy agendas this work has been pushed through – including the politically unglamorous task of agreeing product lists and legal disciplines that bite precisely when domestic pressure is greatest.
For Singapore, the logic is simple: if New Zealand cannot get fuel and diesel, it cannot produce food. For New Zealand, tying itself into Singapore’s highly connected energy and logistics hub vastly improves its chances of staying supplied when markets seize up.
The Singapore agreement slots into a broader Luxon‑era trade architecture where Trade and Investment Minister Todd McClay has played a leading role in the emerging Future of Investment and Trade Partnership (FIT) group – a coalition including Switzerland, Singapore, Norway and others – where New Zealand has been central in pushing workstreams on supply chains, non‑tariff barriers and new subsidy disciplines.
In July, McClay will host the group in Auckland.
For Luxon’s part he has personally championed a structured European Union–Comprehensive and Progressive Trans Pacific Partnership digital dialogue, picking up an idea first advanced under New Zealand’s 2023 host year for CPTPP trade ministers and promoting it in conversations with European Commission President Ursula von der Leyen.
Brussels is exploring this seriously.
Taken together, these moves demonstrate New Zealand is an active rule‑shaper in niche but crucial areas – supply‑chain resilience, crisis trade rules and digital trade.
Luxon’s challenge now is domestic.
Agreements like the Singapore essential-supplies pact are technically dense.
They are easy to overlook when debate continues over the more theatrical US$20 billion ($34b) set as an aspirational target for New Zealand to invest in India under an FTA due to be signed in India this month.
Yet in global shocks – whether in fuels, food, or through pandemic or geopolitical disruption – it is precisely these rules-based arrangements that will determine whether New Zealand can keep its trucks moving, farmers supplied with fertiliser and diesel, and ships sailing.
Luxon’s challenge is to translate that story for voters.
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