China Free Trade Upgrade further boosts economic recovery
- Exports to China reach $21.5 billion
- 99 percent of wood and paper trade to China now tariff-free
- Perishable goods benefit from quicker customs turnaround
- Dairy exporters save a further $200m this year from original FTA
The Upgrade to New Zealand’s Free Trade Agreement with China entered into force today, further accelerating New Zealand’s economic recovery from COVID-19, Trade and Export Growth Minister Damien O’Connor announced.
“Our trade agenda has strong momentum, with the China Upgrade coming weeks after the signing of our UK FTA, which will add up to $1 billion to our GDP,” Damien O’Connor said.
“China continues to be an important market for New Zealand, with goods and services exports reaching $21.5 billion in 2021.
“This Upgrade is very good news for our forestry sector, which exported $4 billion of product to China last year. The elimination of tariffs on an additional 12 wood and paper products means 99 percent of wood and paper trade to China will be tariff-free, removing an additional $1.5 million in tariffs, on top of those already delivered through the 2008 FTA.
“Customs red tape will also be cut, with the introduction of a faster six-hour clearance time for perishable goods, which will hugely benefit businesses such as our seafood exporters.
“Our service exporters will benefit from improved access to China’s services market, including environmental services, airport and ground handling services, as well as commitments to deliver New Zealand any future improvements in key services sectors including education.
“The Upgrade also modernises other key aspects of the original agreement including in the areas of e-commerce, government procurement, environment and trade, and competition.
“In addition to the Upgrade, as of 1 January 2022, most dairy products exported to China are entitled to duty-free access, immediately saving businesses $200 million in tariffs. Remaining costs will be removed in 2024.
“The Government’s focus on securing free trade agreements has helped to support an export boom, with our primary sector exports forecast to hit a record $50.8 billion for the year ending June 2022, whilst the NZ-US Council recently reported the success of our high-tech sector in the USA – a country that’s become our largest services market.
“What we are seeing is that consumers, customers and partners around the world understand the value of New Zealand’s goods and services.
“The Government is also negotiating the conclusion of a free trade agreement with the European Union as soon as possible. The Regional Comprehensive Economic Partnership – the world’s largest FTA – has also entered into force along with PACER Plus in the South Pacific,” Damien O’Connor said.
You can find out more about the China FTA Upgrade and how it will benefit New Zealand businesses on the MFAT website.