China-New Zealand Free Trade Agreement Enters Into Force

by Mary Swire, Tax-News.com, Hong Kong

03 October 2008

New Zealand's Trade Minister, Phil Goff, has announced this week that the Free Trade Agreement (FTA) between China and New Zealand has officially entered into force.

As of October 1, 2008, tariffs on 35% of New Zealand's exports to China will be set at zero, with the aim to increase this number over the next five years. It is hoped by Mr Goff that by the start of 2019, 96% of exports from New Zealand will be tariff-free.

Commenting on the positive effects the FTA will have for both countries, Mr Goff stated:

“This gives our exporters a significant competitive advantage in one of the world’s largest markets. Export of goods to China is already worth about NZD2bn (USD1.3bn) a year, while China is our largest source of international students and now our fourth largest source of tourists.

“The estimated benefit to New Zealand of a free trade agreement is a growth in exports against baselines of between NZD225m and NZD350m a year and a reduction in tariff payments worth NZD115m," Goff explained, going on to add:

“NZTE is to run another series of workshops from November this year and is working with Chambers of Commerce to help businesses in the market. It is also in the process of opening five more offices in China, bringing the total to eight, which will further assist New Zealand businesses wanting to enter or expand their presence in the Chinese market.

“The FTA provides additional protection for New Zealand investors in China and contains mechanisms that will allow for the two countries to resolve trade and investment issues.

“Parallel agreements to the FTA also provide mechanisms for cooperation and consultation over issues of trade and labour and environmental standards, the first such agreement that China has entered into with any trading partner."

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