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Sunday, June 20, 2021
Trading

China and New Zealand upgrade free trade pact

free trade

New Zealand trade minister Damien O’Connor signed the upgraded agreement through a “virtual signing ceremony” with Chinese commerce minister Wang Wentao

China and New Zealand signed a deal to upgrade their existing free trade pact on Tuesday, which will give commodities exports from the Pacific nation increased access to the world’s second-largest economy.

New Zealand Prime Minister Jacinda Ardern confirmed the signing of the agreement at a news conference on Tuesday, noting the significance of the deal amid a crippling pandemic and global economic crisis.

The pact has been discussed for years and was concluded in November 2019, but was pending China’s official signing.

New Zealand trade minister Damien O’Connor signed the upgraded agreement in Wellington through a “virtual signing ceremony” with Chinese commerce minister Wang Wentao, who was in Beijing.

New Zealand said the agreement “modernizes” the existing free trade agreement with China and ensures it remains fit for purpose for another decade.

It makes exporting to China easier and is expected to reduce compliance costs for New Zealand exports by millions of dollars each year.

The upgrade will also mean that 99% of New Zealand’s nearly NZ$3 billion ($2.16 billion) wood and paper trade to China will be granted tariff-free access, O’Connor said in a statement.

The deal will benefit New Zealand exporters of perishable goods such as seafood, the forestry sector, and other primary sector industries.

Existing conditions for dairy products 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, O’Connor said.

New Zealand was the first developed country to sign a free trade agreement with China in 2008, which has long been touted by Beijing as an exemplar of firsts with Western countries.

China is now New Zealand’s largest trading partner, with annual two-way trade of over NZ$32 billion ($21.58 billion).

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