New Zealand has brought into force a world-first agreement with Singapore aimed at protecting the flow of essential goods during global disruptions, as new research shows the conflict in the Middle East continues to weigh heavily on Kiwi businesses, supply chains and consumer confidence.
The Agreement on Trade in Essential Supplies (AOTES) officially took effect following a ceremony in Auckland on Saturday, with Singapore Deputy PM and Minister for Trade and Industry Gan Kim Yong in attendance.
The pact is designed to strengthen supply chain resilience by guaranteeing the continued movement of critical goods between the two countries during tumultuous periods.
New Zealand’s Trade and Investment Minister Todd McClay said the agreement – which was initially signed in Singapore on 4 May 2026 and witnessed by New Zealand Prime Minister Christopher Luxon and Singapore Prime Minister Lawrence Wong – was particularly timely given ongoing geopolitical uncertainty.
“As conflict in the Middle East escalates, AOTES strengthens supply chain resilience and helps ensure the continued flow of essential goods when supply chains come under pressure.”
Under the agreement, Singapore guarantees to supply New Zealand with fuel, medicines and chemicals, while New Zealand guarantees food supplies to Singapore, providing greater certainty for businesses and citizens.
“The AOTES agreement reflects the long-standing and complementary relationship between our economies and the depth of our bilateral Comprehensive Strategic Partnership,” added McClay.
“This world-first agreement reinforces New Zealand’s and Singapore’s commitment to open, rules-based trade and supports the resilience of the supply chains that our businesses rely on every day.”
The agreement comes as new research from Westpac NZ highlights the ongoing economic impacts of the Middle East conflict, despite easing fuel prices.
A national survey of 535 New Zealanders – conducted before hostilities between the US and Iran ramped up again – found 60 percent remain concerned about the conflict’s impact on their finances, down from 80 percent in March but indicating that uncertainty remains widespread.
Westpac NZ Managing Director of Institutional and Business Banking Reuben Tucker said recent events had reinforced the need for businesses to remain prepared.
“The flare-up in geopolitical tensions over the past few days – and the subsequent rise in oil prices – reinforces that we’re still in an uncertain and volatile environment,” he said.
“The good news is that as a country we’ve shown ourselves to be adaptable and resilient through external shocks in recent years, and this episode is no exception.
“These survey results, combined with our internal data, show we’ve collectively made sensible changes to offset the impacts of higher costs, such as driving less (44 percent of respondents), changing how we shop for groceries (31 percent) and deferring planned large purchases (25 percent)”.
While household concern has eased since March, Tucker said businesses in several sectors continue to face elevated costs and supply chain challenges.
“We’re talking to farmers whose fertiliser costs are way over budget, retailers who are still facing subdued consumer demand for their goods, and manufacturers grappling with supply chain issues,” he added.
“These sort of challenges are making businesses cautious about committing to hiring and spending decisions until costs come down.
“Our key advice has been to control the things they can control. That means making sure they have sufficient cash on hand, stockpiling inventory if necessary and looking for alternative ways to source materials more cheaply.”
However, Tucker noted that positive signs are emerging in certain sectors, including tourism and fast-moving consumer goods.
“There are better signs for some sectors – such as tourism and fast-moving consumer goods – where a slow recovery in household confidence is driving a lift in discretionary spending.
“In other words, people are splashing out on those plane tickets or a new pair of shoes that they might’ve held back on three months ago.”
Together, the Singapore agreement and the new Westpac research underline the growing importance of supply chain resilience as geopolitical tensions continue to drive uncertainty, emphasising the need to diversify supply arrangements, strengthen international partnerships and improve continuity planning to reduce the impact of future disruptions.
