New Zealand and China have signed a preliminary deal to upgrade the two countries existing Free Trade Agreement.
The deal, signed on Jan. 26, comes as Beijing seeks to establish itself globally as an advocate of multilateralism while trade disputes continue with Australia, New Zealand’s closest neighbour.
In a virtual signing ceremony, New Zealand’s Trade Minister Damien O’Connor said the upgraded deal expands the existing trade deal making it “fit for purpose” for another decade.
“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,” O’Connor said.
“China is one of New Zealand’s most important relationships. Signing this agreement today builds on the significant benefits both countries have enjoyed as a result of our existing FTA.”
The deal provides for tariffs to be either removed or cut on many of New Zealand’s mostly commodities-based exports, ranging from dairy to timber and seafood, while compliance costs will also be reduced. The deal will also open up sectors such as aviation, education and finance.
Environmental protections and not lowering standards to gain a trade or investment advantage are included in the deal.
‘War of Words’ Across the Tasman Sea
While the deal will see a rise in annual two-way trade worth approximately NZ$32 billion (AUS$30 billion), trade disputes across the Tasman Sea between Australia and China have pushed the diplomatic relationship to it’s lowest point.In reference to the upgraded deal with China, New Zealand’s Prime Minister Jacinta Ardern said the “modernised” trade with China remains one of the island country’s most important trading partners.
“Anywhere where there is increased opportunities for trade is good,” Collins said.
“I also understand New Zealand, with around a third of all our exports going to China, that China has an incredible sway over New Zealand because of that financial dependency.
“It is really important ... that, yes, we want to keep those Chinese markets working well. But we also need to build other trading relationships,” she said.
New Zealand’s Parliament will now consider the agreement for ratification before it enters into force.
The Epoch Times reached out to New Zealand’s Ministry of Foreign Affairs for comment but did not receive a response in time for publication.