The upgrade will also mean that 99% of New Zealand’s nearly NZ$3 billion wood and paper trade to China will have tariff-free access to China.
Trade Ministers for New Zealand and China have signed last week an upgrade to the free trade agreement between the two countries. New Zealand will have 98% 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.
Exporters will have key staff they can contact at Chinese ports to iron out any issues.
Under the upgraded agreement, 99% of New Zealand’s NZ$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 NZ$36 million.
Wood products have been a major export to China. Of the NZ$6.4b in wood exports in 2018, 48% headed to China.
“This modernises our free trade agreement and ensures it will remain fit for purpose for another decade,” New Zealand Minister for Trade and Export Growth Damien O’Connor said.
“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.”
Minister O’Connor signed the upgraded agreement at the Beehive in Wellington through a ‘virtual signing ceremony’ with China’s Minister of Commerce, Wang Wentao, who was participating from Beijing.
Mr Wentao, 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.
Key outcomes of the upgrade include new rules that will make exporting to China easier and reduce compliance costs for New Zealand exports, a better deal for services exporters through expanded market access and most-favoured nation commitments, and the introduction of environmental considerations – the most ambitious trade and environment chapter and the highest level of commitment that China has agreed in any FTA.
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