New Zealand signs upgraded free trade agreement with China — UW GROUP

New Zealand signs upgraded free trade agreement with China

New Zealand has signed an upgrade to the China free trade agreement, offering some New Zealand goods faster access to Chinese markets and a reduction in tariffs for paper and wood products. Trade Minister Damien O’Connor and China’s Commerce Minister Wang Wentao inked the deal in a video-link meeting on Tuesday afternoon, more than a year after the deal was first settled by the countries.

O’Connor, signing the paperwork in the Beehive in Wellington, said the upgrade meant the free trade agreement was suitable for another decade. New Zealand was the first developed country to sign a free trade agreement with China, in 2008.

«What this does is modernise the free trade agreement that we signed in 2008, brings it up to date. It provides real opportunities for exporters,” O’Connor said.

“Ten years ago, some of the issues around trade were not as sophisticated, this agreement allows us to move forward, particularly in the area of services.”

New Zealand will already have 98 per cent free trade with China, its largest trading partner, once the existing free trade agreement comes fully into force. The upgrade has primarily focused on reducing compliance costs for New Zealand exporters, and other measures which ease access to China’s markets.

At the Chinese border, there will be an expedited six hour “clearance time” for perishable goods, such as seafood. Exporters will have key staff they can contact at Chinese ports to iron out any issues. More visas for Chinese tour guides will be provided, and fewer visas will be provided to traditional medicine practitioners.

“These are technical issues that we’ve tied up through the upgrade and will give more security and certainty to all our exporters,” O’Connor said.

Under the upgraded agreement, 99 per cent of New Zealand’s $3 billion trade in paper and wood products will gain tariff-free, preferential access to China. An additional 12 wood and paper products will have duties removed; the expected value of this change was $36 million.

Wood products have been a major export to China. Of the $6.4b in wood exports in 2018, 48 per cent headed to China.

There has been no change to the deadline for removing tariffs on dairy products under the existing agreement. Most diary products will be tariff-free in a year’s time, and milk powder by 2024.

Environmental considerations have entered the free trade agreement with the upgrade, including a provision that environmental measures should not be weakened to promote trade, and that environmental standards cannot be wielded for trade protectionist purposes.

«It upholds environmental standards and doesn’t allow any of those to be reduced for trade advantage,” O’Connor said.

O’Connor said China would receive access to a market of highly desirable products through the upgrade. Rules for Chinese investors in New Zealand would not change in light of the agreement.

Having signed the upgraded agreement, New Zealand’s Parliament will consider and ratify the deal before it comes into force.

Wang, speaking through an interpreter, said the signing of the upgrade was “another milestone” in co-operation between the countries.

«I’ll be more than happy to maintain working relations with you; jointly break new ground in trade and economic relations between China and New Zealand,” he said.


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