NZ and China upgrade free trade agreement
The New Zealand and Chinese governments have signed an upgrade to the free trade agreement between the two countries.
Trade and Export Growth Minister Damien O’Connor signed the upgrade through a virtual signing ceremony with China’s Minister of Commerce, Wang Wentao.
“This modernises our free trade agreement and ensures it will remain fit for purpose for another decade,” says O’Connor.
“This upgraded agreement comes at a time of considerable global economic disruption due to COVID-19. The upgraded free trade agreement is part of the Government’s Trade Recovery Strategy, in response to the economic shock of COVID-19.”
He says China is one of New Zealand’s most important relationships and signing the agreement builds on the significant benefits both countries have enjoyed as a result of our existing FTA.
For the first time, environmental considerations have been included in the upgrade - meaning both countries have committed to ensuring environmental standards aren't lowered for a trade or investment advantage or used for trade protectionist purposes.
O’Connor says the considerations are “the most ambitious trade and environment chapter and the highest level of commitment that China has agreed in any FTA”.
It will also mean that 99 per cent of New Zealand’s nearly $3 billion wood and paper trade to China will have tariff-free access to China.
“New Zealand’s existing free trade agreement with China has been very successful, but China’s free trade agreements and our business practices have evolved since it was signed over a decade ago,” Damien O’Connor said.
“This is why we entered into upgrade negotiations: to ensure our agreement is modern and deepens our relationship further, and that New Zealand’s exporters have the best possible access to the China market,” Damien O’Connor said.
The upgrade will make exporting to China easier and cheaper by, for example, simplifying documentation requirements and establishing dedicated contacts for New Zealand businesses at key ports in China.
In dairy, existing conditions have been maintained, with all safeguard tariffs to be eliminated within one year for most products, and three years for milk powder.
“This means that by 1 January 2024, all New Zealand dairy exports to China will be tariff free.
“Protections in the existing agreement that are important to New Zealanders, such as our rules on overseas investment and the Treaty of Waitangi exception, remain in place,” says O’Connor.
Before the agreement is enforced it will have to approved by Parliament.
China is New Zealand’s largest trading partner, with two-way goods and services trade now exceeding $32 billion a year.