Out-Law News | 29 Jan 2021 | 12:28 pm | 1 min. read
China and New Zealand have agreed to upgrade their existing free trade agreement (FTA), making changes to goods market access, services exporters’ conditions and exports tariff barriers.
They also agreed to increase cooperation in competition policy, e-commerce, government procurement and environment and trade.
The countries also agreed to start negotiation of a 'negative list' services framework within two years of entry into force of the upgraded FTA.
China’s commerce minister Wang Wentao and New Zealand’s minister for trade and export growth Damien O’Connor signed the deal.
Based on the Regional Comprehensive Economic Partnership (RCEP), China will further open up aviation, education, finance, elderly care and passenger transport to New Zealand.
The two sides will open their markets for certain wood and paper products and optimise trade rules such as rules of origin, technical barriers to trade and customs facilitation.
China will remove tariffs on 12 additional lines of wood and paper products in New Zealand in a 10-year implementation period. 99% of New Zealand’s $3 billion wood and paper trade to China will be tariff-free once fully implemented.
New Zealand will double the quotas for Chinese language teachers and tour guides to 300 and 200 respectively in its work permit arrangement.
New Zealand will lower the review bar for Chinese investment so that it receives the same review treatment as members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Trade expert Dr. Totis Kotsonis of Pinsent Masons, the law firm behind Out-Law, said: “This is great news for both New Zealand and China. China is New Zealand's single most important trading partner. Over and above the removal of some additional tariffs on New Zealand's trade with China, the Agreement also reduces non-tariff barriers effectively lowering trading costs between the two nations. The new agreement will also improve the Pacific nation's access to certain Chinese services sectors.”
“For China, this is yet another upgraded free trade agreement under its belt only months after the conclusion of the Regional Comprehensive Economic Partnership with 14 other nations and the conclusion some weeks ago of a comprehensive bilateral investment treaty with the EU. The lowering of barriers on trade and investment through these bilateral and multilateral arrangements are clearly important for the further expansion of the Chinese economy, already the world's second largest,” he said.
China and New Zealand signed the FTA in April 2008. The two sides launched the upgrade negotiation in November 2016 and completed in November 2019.