China and New Zealand sign free trade agreement

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April 11 – China and New Zealand signed a free trade agreement on April 7 in Beijing, a culmination of three years of talks between the two nations.

Signed in the Great Hall of the People, the agreement marked “the culmination of fifteen rounds of negotiations over three years,” New Zealand Prime Minister Helen Clark said.

The agreement, which is scheduled to be implemented October 1, is the first between China and a developed country. “Being the first developed country to sign a comprehensive FTA with China is an enormous achievement for New Zealand,” said New Zealand Trade Minister Phil Goff.

The ceremony, also witnessed by Chinese Premier Wen Jiabao and Prime Minister Clark, marked the beginning of a partnership for the two countries. Early on in the talks, which began in December 2004, Wen had suggested the signing of the agreement would “further the friendly and cooperative relations between the two countries, promote each’s economic growth, and bring practical benefits to the two peoples.” He described the event as “a day of historical significance” and said the move “met the goal” the two countries set during negotiations.

With the desire to continue evolving as the world’s fastest economy, China offers New Zealand its electrical machinery, mechanical equipment, clothes, furniture and toys. New Zealand in return, boasts goods China currently lacks. Commodities such as dairy products, the price of powdered milk has risen by 20 percent in the last year alone.

In addition to this, New Zealand offers high quality of food, extensive wines from its renowned vineyards increasingly becoming popular in China with the growing nouveau bourgeoisie, and resources of woods, pulp and paper, wool and animal furs.

All goods exported from China to New Zealand will be tariff free from 2016, while tariffs on most New Zealand exports to China will be eliminated from 2019.

“It [the FTA] will give New Zealand exporters increased access to the world’s fastest growing economy. China is already our third largest trading partner and a fast growing export market for us,” said Clark.

Aside from trading goods the agreement also highlights the service sector, ranging from banking, environment, education and entertainment, to construction and transport.

By 2007, New Zealand had invested in 1,301 project in China for a total of US$750 million. China in turn, invested US$52.24 million in New Zealand’s non-financial sectors, including shipping, trade, forestry and tourism.

In 2007, the total volume of trade between the two countries reached US$5.5 billion, up 10 percent from the year before.