China and New Zealand signed an extension to protocol on upgrading their 12-year-old free trade agreement (FTA) on 26 January. In November 2019, the two countries had announced the conclusion of their three-year negotiations on the upgrade. China is now New Zealand’s largest trading partner.
With the upgraded FTA, both countries open their markets for certain wood and paper products. The FTA consists of provisions on customs procedures, cooperation and trade facilitation, rules of origin, goods market access, services, competition policy,e-commerce, agricultural cooperation, environment, and government procurement.
Chinese Minister of Commerce Wang Wentao and his New Zealand counterpart signed the protocol in a virtual conference.
“The signature of the protocol is a concrete action in China’s practice of multilateralism and the construction of an open world economy, and marks an important step in implementing the FTA upgrade strategy,” Wang said in a statement.
With this FTA, New Zealand will lower its threshold for reviewing Chinese investment, allowing it to receive the same review treatment as members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Both countries have also resolved to strengthen cooperation in the fields of e-commerce, competition policy, government procurement, the environment and trade.
In 2008, China signed an FTA with New Zealand, the first FTA between China and a developed country. As per the Ministry of Foreign Affairs and Trade of New Zealand, the goods exports to China from New Zealand have quadrupled since the free trade agreement was signed and entered into force in 2008. According to the Ministry of Foreign Affairs and Trade of New Zealand, the two-way trade has quadrupled from $8 billion to over $32 billion since the free trade agreement was signed in 2008.
This upgrade is deemed to provide a better deal for New Zealand’s services exporters, through expanded market access and most-favoured nation commitments to protect New Zealand’s competitive advantage in the China market into the future. The upgrade will also streamline compliance requirements that will reduce some of the red tape and address a range of non-tariff measures.
China is New Zealand’s second largest and fastest growing tourism market, largest source of international students, and a significant source of foreign investment.