New Zealand Prime Minister Jacinda Ardern is holding a meeting with Chinese Prime Minister Li Keqiang at the Great Hall of the People in Beijing, China on April 1, 2019.
Naohiko Hatta | Swimming pool | Kyodo News | Getty Images
China and New Zealand signed an agreement to update their existing free trade pact on Tuesday, which will give the Pacific nation’s commodity exports greater access to the world’s second-largest economy.
New Zealand Prime Minister Jacinda Ardern on Tuesday confirmed the signing of the agreement at a press conference, and noted the importance of the agreement amid a paralyzing pandemic and a global economic crisis.
The pact has been debated for years and concluded in November 2019, but was pending China’s official signing.
New Zealand Trade Minister Damien O’Connor signed the updated agreement in Wellington through a “virtual signing ceremony” with Chinese Trade Minister Wang Wentao, who was in Beijing.
New Zealand said the deal “modernizes” the existing free trade agreement with China and ensures it remains fit for purpose for another decade.
It facilitates exports to China and is expected to reduce New Zealand’s export compliance costs by millions of dollars each year.
The upgrade will also mean that 99% of New Zealand’s timber and paper trade near US $ 3 billion ($ 2.166 billion) will be granted tariff-free access, O’Connor said in a statement.
The agreement will benefit New Zealand exporters of perishable products such as seafood, forestry and other primary industries.
Existing conditions for dairy products have been maintained, eliminating all safeguard tariffs in one year for most products and three years for milk powder.
“This means that by January 1, 2024, all dairy exports from New Zealand to China will be duty free,” O’Connor said.
New Zealand was the first developed country to sign a free trade agreement with China in 2008, which Beijing has long been touted as an example of developments with Western countries.
China is now New Zealand’s largest trading partner, with annual bidirectional trade of more than A $ 32 billion ($ 21.58 million).
But the links have been tested under the Ardern government, as New Zealand criticized China’s influence in the small Pacific islands and raised human rights concerns about Muslim Uighurs in Xinjiang. Ardern also supported Taiwan’s participation in the World Health Organization (WHO) despite Beijing’s warning.
The trade pact with New Zealand also comes when Beijing’s ties with neighboring Australia worsened after Canberra called for an independent investigation into the origins of the coronavirus pandemic, which was first reported in central China.
Australia has appealed to the World Trade Organization to review China’s decision to impose heavy tariffs on Australian barley imports.
New Zealand, which will host the Asia-Pacific regional economic cooperation summit this year, has said it would be willing to help negotiate a truce between China and Australia.