On Tuesday, New Zealand’s Minister for Trade and Export Growth, Damien O’Connor, announced an upgrade to New Zealand’s Free Trade Agreement (FTA) with China to aid economic recovery from the COVID-19 pandemic; it is likely to come into force on April 7 this year.
As per the official press release by the Government of New Zealand, O’Connor called the upgrade protocol a significant step and a part of measures undertaken by the government to drive economic recovery from the pandemic. “Our trade agenda has very good momentum, with our primary industry exports forecast to hit a record $50 billion this year alone,” he said.
An upgraded free trade agreement (FTA) between China and New Zealand, which is expected to bring more benefits to the peoples of the two countries, will be effective from April 7, according to a statement released by the Chinese Ministry of Commerce on Tuesday. pic.twitter.com/qZ7onT1WD5
— China News 中国新闻网 (@Echinanews) February 15, 2022
“We will soon be concluding our FTA negotiations with the UK, which will remove tariffs on our exports and create new market opportunities for New Zealand businesses. Our free trade negotiations are progressing with the European Union for access to a market of 450 million people. In January, the Regional Comprehensive Economic Partnership (RCEP) entered into force. And then, of course, we have PACER Plus, which entered into force at the end of 2020,” O’Connor added.
The ratification and the implementation date comes after both New Zealand and China signed the FTA upgrade in January 2021. The entry into force date was agreed last week during a virtual meeting between O’Connor and his Chinese counterpart Wang Wentao.
According to the press release, the goods and services export between China and New Zealand amounted to $20.1 billion in the year ending June 2021. With the upgrade protocol, New Zealand businesses would benefit from updated rules underpinning the trade. “This Upgrade modernises the original 2008 New Zealand-China FTA to ensure it remains fit for purpose,” remarked O’Connor.
Additionally, the upgrade expands market access for goods and services and includes additional trade facilitation measures. Once implemented, the upgrade will improve market access in terms of goods by removing tariffs from 99% of New Zealand’s wood and paper trade worth $4 billion to China.
As a result of the implementation of the current FTA, Wellington’s dairy products to Beijing are entitled to duty-free access from January 1 this year. O’Connor said this would benefit several of the country’s rural exports to China and is expected to bring in additional savings of $180 million per annum at current export volumes.
Crucially, as China is New Zealand’s largest trading partner, Wellington has often adopted a mild stance towards the South Asian giant regarding cybersecurity, the COVID-19 pandemic, and the Winter Olympics.
New Zealand has been accused of not being vocal about human rights abuses in China compared to other Five Eyes partners—the United States (US), Australia, Canada and the United Kingdom (UK)—as it didn’t want to jeopardise its trade relationship with the economic giant.
Moreover, while a number of Western countries, including the US, Lithuania, Australia, Canada and the UK, announced a diplomatic boycott of the Beijing Winter Olympics due to human rights concerns in Hong Kong and Xinjiang, New Zealand decided against diplomatic representation due to concerns over COVID-19.
Despite criticism from its Western partners, New Zealand has released statements condemning the actions of Chinese authorities. For instance, New Zealand joined the Media Freedom Coalition last week to express concern over the suppression of freedom of speech in Hong Kong. Furthermore, in May last year, New Zealand’s Prime Minister, Jacinda Ardern, expressed concern over China’s divergent values and interests and lodged protests with Beijing regarding the human rights situation of Uyghurs in Xinjiang and China’s growing aggression in Hong Kong.