China, New Zealand upgrade FTA deal

SHI YU/CHINA DAILY

Signing part of effort to improve free trade zones, Chinese minister of commerce says

The upgrade of the free trade agreement between China and New Zealand marked another landmark in trade relations between the two nations, officials and experts said, with NZ businesses hailing the FTA for boosting their confidence and ushering in more business opportunities in the Chinese market.

The nations inked the upgrade to their 12-year-old bilateral FTA on Jan 26, on the basis of the Regional Comprehensive Economic Partnership that they had signed along with 13 other countries in November.

The deal－signed via video link by Wang Wentao, minister of commerce, and his Kiwi counterpart Damien O'Connor－included new chapters on e-commerce, environment and trade, competition policy and government procurement, in addition to improvements on customs procedures and cooperation, rules of origin and technical barriers to trade.

The signing of the upgrade is part of China's efforts to practice multilateralism, build an open world economy and improve its free trade zones, Wang said in a news release.

"Beyond improving the trade rules between New Zealand and China, this upgrade is yet another demonstration of the commitment both countries place on free trade, open trade and the rules-based trading system," New Zealand Prime Minister Jacinda Ardern said in a video speech.

"We know from experience just how important our first free trade agreement was in advancing our relationship with China－with benefits to both sides far beyond just trade. We look forward to this upgrade further building on these ties, and contributing in a very practical way to the ongoing vibrancy of our trade and economic relationship," she said.

China signed the bilateral FTA with New Zealand in 2008－its first with a developed country. China is now New Zealand's largest trading partner and second largest source of foreign investment, with bilateral trading volume rising from $4.4 billion in 2008 to $18.1 billion in 2020, according to the Ministry of Commerce.

Su Qingyi, a researcher on world economics and politics with the Chinese Academy of Social Sciences, said the upgrade showcased China's eagerness to expand its opening-up and uphold free trade, and that it would also help the nation win support from New Zealand to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

As part of the new trade deal, New Zealand will reduce barriers for Chinese investors, granting them the same review threshold treatment as members of the partnership.

The upgrade also included further improvements to the Pacific nation's goods' market access into China through tariff elimination on a dozen additional wood and paper products worth $25.2 million in trade to China, according to New Zealand authorities.

China will also expand opening-up in some service industries such as aviation, education, finance and elder care, with steps to eliminate all safeguard tariffs within one year for most dairy products and three years for milk powder.

The upgrade has provided a significant boost to Kiwi businesses looking to further bolster their market presence in China.

"In an era where we are seeing pockets of protectionism pop up around the world, it is refreshing to see China and New Zealand continue to take leading steps towards free trade," said Teh-han Chow, CEO of Greater China branch of Fonterra, the New Zealand-based multinational dairy cooperative.

The upgrade covers a range of new trade issues, including areas such as e-commerce, and provisions aimed at facilitating trade in goods, which will continue to support the cooperative's exports into the China market, he said.

He explained that China has become the cooperative's largest, most important and fastest growing market in the world, with sales volume accounting for one-quarter of its global total since Fonterra entered the market over 40 years ago.

"Looking into the future, the 'dual circulation' development paradigm put forward by the Chinese government will further strengthen Fonterra's determination and confidence in our long-term development in China," he said.

Michael Jiang, general manager of the Greater China branch of Zespri, a cooperative of kiwifruit growers in New Zealand, said the upgrade showed the strong determination of both sides to support multilateralism and free trade.

"With the FTA upgrade, China is reaffirming its opening-up policy, which is especially important nowadays. This gives Zespri even more confidence in the Chinese market while also providing impetus to the global economy," he said.

China is the largest market for kiwifruit, accounting for around 20 percent of the cooperative's global revenue, he said.

Under the facilitation measures from the upgrade, Jiang said he expects the cooperative's sales to double in China by 2025, by which time a quarter of its sales globally will have been sold in China.

Shi Jing contributed to this story.