New Zealand-China Free Trade Agreement

Trade and Economic Cooperation Framework between New Zealand and the People's Republic of China - 28 May 2004

• The Agreement
• Annex I
• Annex II

The Agreement

New Zealand and the People’s Republic of China ("the Parties”)

Wishing to build on the long-term stability and rapid growth of their bilateral economic and trade cooperation since the establishment of diplomatic relations in 1972;

Desiring to strengthen their comprehensive and stable economic and trade relationship;

Noting their membership of the World Trade Organisation (WTO) and the Asia-Pacific Economic Cooperation forum (APEC), and desiring to work together to strengthen the multilateral trading system and to promote regional economic development;   

Recalling the commitment by Prime Minister Helen Clark and President Hu Jintao to formulate a Trade and Economic Cooperation Framework on the basis of the principles of equality, mutual benefit and respect, complementarity and cooperation; 

Emphasising the Parties’ commitments to elevate their trade, investment and economic relationship to a higher level through developing a Trade and Economic Cooperation Framework;  

Have arrived at the following understandings:

Paragraph 1 

The parties will seek comprehensive trade and investment facilitation and liberalisation through all-round economic and trade cooperation. 

Paragraph 2

The Parties will take steps to promote strategic cooperation in areas of significant mutual economic potential, inter alia: agriculture; animal husbandry; forestry; wool; services, including education, tourism, air services, and labour and professional services; science and technology; environmental protection; information and communication technology; and investment.  The Parties will promote cooperation on: measures to ensure human, plant and animal health and food safety; technical regulations and standards; conformity assessment; customs administration; intellectual property; and the facilitation of business travel and of links between industry and business groups.  The Parties are willing to work together to explore opportunities for New Zealand businesses to participate in China’s western development strategy and the revitalisation of its north-eastern industrial areas.  See Annex I for details of sectoral cooperation. 

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Paragraph 3 

The Parties recognise the benefits of regular bilateral meetings between Leaders and between Ministers responsible for trade and the economy in building a stronger bilateral partnership. They will work together cooperatively to facilitate such meetings, including at multilateral and regional fora. 

Paragraph 4   

The Parties will establish a Joint Ministerial Commission to enhance dialogue on trade and economic matters of common interest, and to facilitate bilateral trade and investment.

The Joint Ministerial Commission will be jointly chaired by a Minister from New Zealand and a Minister from China or by representatives designated by them.

Paragraph 5 

The Parties will further strengthen the role of the Joint Trade and Economic Commission (JTEC) in continuing to build the trade and economic relationship between New Zealand and China.  The Parties reaffirm the mandate of the JTEC.

The Parties will strengthen other existing consultation mechanisms in promoting cooperation in key sectors and in facilitating dialogue between Chinese and New Zealand departments, agencies, and regulatory authorities, including the Joint SPS Commission, the Joint Agriculture Commission, the Joint Forestry Commission, the Joint Education Working Group and the Arrangement of Establishment of a Consultation Mechanism on WTO/TBT Issues between the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China and the Ministry of Economic Development of New Zealand. 

Paragraph 6 

The Parties recognise the opportunities presented by high-level visits between business and academic communities in both directions, and will use such contacts to pursue further growth of bilateral trade and economic cooperation. They also support the development of various forms of cooperation between the Chinese and New Zealand business and academic communities.  

The Parties will facilitate mutual business travel, the provision of business visas, linkages between business and industry associations, and trade and investment exhibitions.  The cooperation in the above-mentioned areas and related initiatives will assist firms of both countries to identify commercial opportunities and expand bilateral trade and investment.  

Paragraph 7  

The Parties acknowledge the importance of regular high-level consultations on regional and multilateral trade and economic issues, including in APEC and the WTO.  They will strengthen consultation on these issues and will seek to coordinate policy positions and approaches to the extent possible.  The Parties will hold regular dialogue on these issues at appropriate senior officials level.  

Paragraph 8 

The Parties recognise that all national government measures that impact on bilateral trade and investment should be carried out in a reasonable, objective and transparent manner. The Parties will afford adequate opportunity for consultations to exchange information on issues by the other Party with respect to such matters. 

The Parties will enhance dialogue on trade matters, including trade remedies, to afford each other fair treatment in trade policy and trade measures.  

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Paragraph 9

The Parties will afford adequate opportunity for consultations to exchange information and views on issues related to the possible implications of agreements between either Party and a third country or countries that provide for preferential treatment of trade or investment.   

Paragraph 10  

New Zealand recognises that China, after 25 years of reform and opening up, has established a market economy system.  From the date of the signature of the Framework, New Zealand will not apply Sections 15 and 16 of the Protocol of the People’s Republic of China to the World Trade Organisation and will not apply paragraph 242 of the Report of the Working Party on the Accession of China to the World Trade Organisation in relation to bilateral trade between the two countries.  The two Parties will jointly undertake a feasibility study (see Annex II) on a bilateral Free Trade Agreement (FTA) negotiation and enter into the negotiations as soon as possible.  The Parties will endeavour to commence negotiations in early 2005.  

Paragraph 11 

The New Zealand-China JTEC will review progress in implementing this Framework, and report to the Ministers of both countries.

Paragraph 12 

The annexes are an integral part of this Framework. 

This Framework will take effect on the date of signing by the Parties, and will remain in effect for five years and for subsequent periods of five years each unless, in the period ending six months before the end of each such five-year period, one of the Parties informs the other that it wishes to terminate the Framework at the end of the relevant five-year period.   

Amendments to this Framework may be mutually determined by the Parties in writing. 

Both English and Chinese language versions of this Framework are equally authentic.  

Signed at  Auckland New Zealand this 28th day of May 2004 

Signed                                                    Signed

Hon Jim Sutton                                        H.E. Bo Xilai 

For the Government of New Zealand      For the Government of the People’s Republic of China 

Annex I 

In order to promote stable economic growth and steady expansion of markets for key sectors, New Zealand and China will extend their cooperation, including in the trade policy area, and create favourable conditions for trade and investment for both countries.  Areas of cooperation mutually determined by the Parties are:

Agriculture, Animal Husbandry, Forestry, Biosecurity and Food Safety 

China and New Zealand will enhance cooperation and further develop trade and investment activities in the areas of agriculture, animal husbandry, forestry, biosecurity and food safety through: the Joint Agricultural Commission established by the New Zealand Ministry of Agriculture and Forestry and the Ministry of Agriculture of the People’s Republic of China in 2001; the Joint Forestry Commission established by the New Zealand Ministry of Forestry and the State Forestry Administration of the People’s Republic of China in 2001; and the Joint SPS Commission established by the New Zealand Ministry of Agriculture and Forestry and the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China in 2001.

• Under the auspices of the Joint Commissions listed above the Parties will encourage cooperation where possible in areas such as:
  • high-tech agricultural science (for example seed improvement, practical     processing techniques, systems management, plant and animal breeding technologies);
  • sustainable pasture management (for example protection of grassland resources and grass seed improvement);
  • animal production (for example animal health and husbandry);
  • forestry (for example forestry breeding, plantation forestry, ecological forestry, forest technology, sustainable forest management, forestry biosecurity, development of new wood products, the drafting and implementing of forestry policies, and trade in wood and forest products).
• The Parties recognise the importance of biosecurity and food safety for ensuring people’s health, for improving their standard of living and for the development of international trade.  Under the auspices of the Joint SPS Commission the Parties will seek to strengthen bilateral communication and consultation mechanisms in relation to biosecurity and food safety. To improve understanding of each other's animal, plant and human health regimes, including pest and disease status, and consistent with WTO rights and obligations, the Parties recognise the value in continuing to share information and build confidence in each other's regimes, including through visits to confirm that those systems achieve the health outcomes sought.  The Parties will enhance dialogue on implementation and understanding of WTO sanitary and phytosanitary rights and obligations.

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Wool

In order to develop the wool trade between China and New Zealand, the industrial organisations of the two countries will strengthen their ongoing dialogue. New Zealand will help Chinese wool and textile businesses to properly purchase and use New Zealand’s wool through various means, for example training and technological cooperation.

Science and Technology

The Parties recall the Agreement between the Government of New Zealand and the Government of the People’s Republic of China on Cooperation in Science and Technology signed in 2003 during President Hu Jintao’s visit to New Zealand.  Based on that agreement, the Parties are willing to strengthen friendly relations and scientific and technological cooperation between the two countries.

The Parties recognise the importance of implementing fully that agreement to enhance cooperation between each other’s research and innovation communities, especially in the priority areas listed in the agreement: animal husbandry, environmental and ecological protection and restoration, forestry and the preservation of natural resources, information technology, biotechnology, geophysics, Antarctic and health research. 

Technical Barriers to Trade

To facilitate trade, the Parties will continue to share information and build confidence in each other’s regulatory approaches with a view to reducing the cost to businesses arising from different technical regulations and standards. 

Based on the Arrangement of Establishment of a Consultation Mechanism on WTO/TBT Issues signed by China and New Zealand, the Parties will strengthen communication and consultation in relation to differences in inspection and technical regulatory approaches by: 

• working to conclude a cooperative framework programme for quality supervision, inspection, standards and conformity assessment;
• enhancing arrangements and consultations between their certification agencies, including under the Arrangement of Establishment of a Consultation Mechanism on WTO/TBT Issues between the General Administration of Quality Supervision Inspection and Quarantine of the People’s Republic of China and the Ministry of Economic Development of New Zealand with a view to supporting recognition of the competence of each other’s testing and certification requirements, particularly in the area of electrical, mechanical and wood products;
• seeking to conclude a bilateral mutual recognition arrangement on electrical and electronic products, taking into account the work to which New Zealand and China have contributed in APEC;
• China hopes to conclude a similar mutual recognition arrangement on machinery and mechanical products;
• encouraging exchanges between officials, regulators and other experts in conformity assessment and standards;
• enhancing cooperation in WTO-related training for Chinese personnel;
• fully utilising the 1999 China-Australia-New Zealand Standard Wool Contract, setting up two-way liaison channels, enhancing contacts and linkages, and jointly adopting effective administrative measures to deal with existing issues, including retesting requirements for wool to ensure the interests of the two Parties are met, and to promote bilateral trade. 

Information and Communication Technology and E-commerce 

The Parties will explore the development of a memorandum of understanding in regard to electronic commerce, information technology and information industries, in order to encourage cooperation in these fields. 

Services

China-New Zealand services cooperation is expanding and trade is growing rapidly.  The Parties recognise that the deepening of cooperation and expansion of trade in services, including education, tourism, air services, and labour and professional services will benefit both Parties.  

Education

The Parties recognise the importance of education and training in removing obstacles to poverty reduction and economic growth. The Parties note the existence of the 2002 Memorandum of Understanding on Cooperation in Education and Training (2002 MOU) and the 2003 Arrangement on Mutual Recognition of Academic Degrees in Higher Education between the Ministry of Education of New Zealand and the Ministry of Education of the People’s Republic of China, which identify fields of mutual interest and create opportunities to develop programmes for cooperation in education and training on the basis of reciprocity and mutual benefit. The Joint Education Working Group will discuss the priorities for expanding cooperation in education and training based on the 2002 MOU. 

Tourism

The Parties recognise the potential for growth in two-way tourism.  They believe that tourism can be further promoted through the following measures:

• expanding the Approved Destination Scheme (ADS) which has operated successfully since its inception in 1999;
• facilitating operation and marketing of tourism services in each other’s markets.

Air Services

The Parties recall the 1993 Agreement between the Government of the People’s Republic of China and the Government of New Zealand relating to Civil Air Transport.  The Parties recognise the potential to increase bilateral air services opportunities and will cooperate to enhance existing arrangements.   

Labour and Professional Services 

The Parties will explore the possibilities for cooperation in matters of labour and professional services. 

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Investment

New Zealand and China already are important investment partners for each other, and both welcome the trend of growing investment facilitated by the 1988 Investment Promotion and Protection Agreement.  Each country has an interest in leveraging off the natural resources, industrial strength and human talents of the other, particularly through ongoing investment linkages. The Parties wish to enhance this process through, inter alia:

• cooperating and exchanging information aimed at improving the climate for two-way investment, including action to enhance transparency and predictability, improving administrative decision-making processes and the protection of investments and investors;
• taking action to build institutional linkages between Chinese and New Zealand agencies with a view to promoting investment visits, business to business initiatives, conferences and other activities.  

Environmental Protection

The Parties will explore opportunities to share information and cooperate on measures to promote environmental protection, sustainable development and resource management, and the protection of biodiversity.  The Parties will encourage trade in goods and services that are designed to protect the environment and will explore opportunities to meet this objective.

Intellectual Property Rights

Intellectual property rights (IPR) are an important component of business activity, research and development. Enforcement of IPR is also vital to the protection, health, safety and welfare of our peoples and a key to the success in the manufacturing, technology and service sectors of our economies.  

The Parties recognise the importance of the protection of IPR in providing a stable and competitive business environment for enterprises and in encouraging research and innovation. The Parties will work cooperatively bilaterally, regionally and multilaterally on matters of intellectual property protection. 

Customs Cooperation

China and New Zealand have been working closely together on customs matters and in so doing assisting each other in trade facilitation and security and compliance with customs laws.  Both Parties’ customs administrations, being active participants in the APEC Sub-Committee on Customs Procedures and under the Collective Action Plans of that committee, have been supporting and contributing to the trade facilitation and security within the Asia-Pacific region.  The Parties wish to enhance this already close association in the following ways:  

• updating the existing 1995 Cooperative Arrangement between New Zealand Customs and the Customs General Administration of the People’s Republic of China to take account of new initiatives in trade facilitation and security, and compliance with customs laws;
• promoting a partnership between the Parties’ respective customs administrations aimed at facilitating trade, enhancing communication and further developing mutual cooperation and understanding in their approaches to international issues;
• promoting electronic commerce strategies as agreed within APEC and the World Customs Organisation (WCO);
• enhancing law enforcement and cooperation to combat customs offences through the development of liaison points designed to provide early responses to assistance requests, particularly in relation to drug trafficking, intellectual property rights infringements and commercial fraud;
• strengthening information sharing in enforcement activity and new methods and technologies;  
• promoting the principles of the WCO Arusha Declaration.  

Facilitation of Business Visits

The Parties will make efforts to simplify the application procedures for business visas, shorten visa processing time, provide facilitation to business people undertaking normal business activities to the greatest extent possible, and will ensure group or individual business visits can take place in a timely manner.  At the same time, the Parties will facilitate long term working visas for business people undertaking long-term business activities in the other country.

Western China Development and Revitalisation of Old Industrial Bases in North-East China Strategies 

China will provide information on the opportunities for New Zealand business to participate in China’s western development and China’s revitalising of its old industrial bases in the north-east.  China encourages New Zealand businesses, particularly those with comparative advantages in areas such as advanced animal and plant genetics, animal husbandry, forestry development, environmental protection, and food processing, to take an active part through trade, investment and economic cooperation. 

New Zealand recognises the importance that China attaches to its western development strategy and the revitalisation of its north-eastern industrial areas.  The Parties are willing to work together to explore opportunities to strengthen cooperation on personnel, including promotion of communication between experts.  China invites New Zealand’s experts to give training to managers and technicians in west and north-east China.  

Industry Consultations

The Parties recognise the valuable contribution that industry and business groups, including bilateral chambers of commerce, make to strengthening bilateral trade and investment relations.  To enhance the role that such groups can play in supporting New Zealand-China business links, including through dialogue with Governments, the Parties will make efforts to enable these groups in a timely way to be legally registered and accredited in each of their respective locations. 

Annex II

The joint feasibility study into a bilateral FTA negotiation will be conducted with the following terms of reference:  

• to provide an overview of recent trends in bilateral trade and economic relations;
• to assess recent international trade policy developments and the possible implications for China-New Zealand trade and investment;
• to identify and describe existing barriers to trade and investment flows, covering goods, services and investment and other issues that might be addressed in a bilateral FTA;
• to assess the impact of the removal and/or reduction of existing barriers to goods and services trade and investment;
• to identify possible cooperation measures to promote trade and investment liberalisation and facilitation between China and New Zealand;
• to make recommendations on the scope of a bilateral FTA negotiation in order to facilitate the commencement of such negotiations in early 2005.

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