The Government says an upgraded free trade agreement signed with China "modernises it for another decade".
Trade ministers for New Zealand and China signed an upgrade to the free trade agreement between the two countries today in a virtual signing ceremony.
“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 for Trade and Export Growth Damien O’Connor said.
O’Connor signed the upgraded agreement at the Beehive in Wellington with China’s Minister of Commerce, Wang Wentao, who was participating from Beijing.
The Government outlined some of the "key outcomes" it says will come in the upgraded deal.
"These include new rules that will make exporting to China easier and reduce compliance costs for New Zealand exports, a better deal for our 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.
"The upgrade will also mean that 99 per cent of New Zealand’s nearly $3 billion wood and paper trade to China will have tariff-free access to China."
The Government says benefits will be brought to a range of New Zealand businesses.
“New Zealand’s existing free trade agreement with China has been very successful, but China’s free trade agreements and our business practices have evolved since it was signed over a decade ago,” O’Connor said.
“This is why we entered into upgrade negotiations: to ensure our agreement is modern and deepens our relationship further, and that New Zealand’s exporters have the best possible access to the China market."
According to the Government, existing dairy conditions have been maintained, with all safeguard tariffs to be eliminated within one year for most products, and three years for milk powder.
“This means that by 1 January 2024, all New Zealand dairy exports to China will be tariff free.
“Protections in the existing agreement that are important to New Zealanders, such as our rules on overseas investment and the Treaty of Waitangi exception, remain in place,” O’Connor said.
National leader Judith Collins gave her thoughts on the updated free trade agreement.
"Anywhere where there is increased opportunities for trade is good. 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," Collins says.
China is New Zealand’s largest trading partner, with two-way goods and services trade now exceeding $32 billion a year.