New Zealand - China
Free Trade Agreement Upgrade
Negotiations have concluded on the upgrade of our free trade agreement with China, our largest trading partner.
Building on the success story
In a world first for any developed country, New Zealand entered into a free trade agreement with China in 2008, giving us a unique competitive advantage.
The free trade agreement is a success story for both countries. It has opened up significant trade and economic opportunities and has been a catalyst for closer cooperation across a number of areas.
China is now New Zealand’s largest trading partner. Two-way trade (exports and imports of goods and services) has more than tripled from $9 billion to over $32 billion since the free trade agreement was signed.
Trade rules and business practices have changed significantly over the past decade. Against this backdrop, New Zealand and China agreed in November 2016 to launch negotiations to upgrade our free trade agreement to modernise it, further reduce barriers impacting exports, and boost trade.
Areas covered by the negotiations
The negotiations sought to improve upon the existing commitments and add new areas not previously covered by the 2008 Agreement. There were nine mutually-agreed areas for negotiation, including:
- Technical barriers to trade
- Customs procedures, cooperation and trade facilitation
- Rules of origin
- Competition policy
- Agricultural cooperation
- Government procurement.
Provision was made for both sides to raise other issues important to them. However, it was agreed that sanitary and phyto-sanitary (SPS) issues would remain outside the scope of upgrade negotiations. These issues continue to be progressed by the Ministry for Primary Industries and its China counterparts.
Our objectives for the upgrade
Negotiations to upgrade the New Zealand-China Free Trade Agreement were an opportunity to ensure our free trade agreement remains leading edge and delivers the best deal for our exporters. Our objectives included:
- Ensuring the free trade agreement reflects the latest developments in China's trade policy over the decade. This includes addressing new issues like e-commerce, and putting an increased focus on environmental issues.
- Getting a better deal for our services exporters. In recent years, China has opened up its services economy to other countries and made commitments in new services sectors not covered in our existing free trade agreement. We wanted the upgrade to reflect these commitments and go further, creating new opportunities for New Zealand service suppliers in the China market.
- Further reducing tariff rates under the free trade agreement; in particular, improving tariff outcomes for sectors previously not covered in the free trade agreement.
- Addressing compliance requirements that New Zealand exporters have identified as adding cost or restricting trade with China. This includes reducing some of the red tape in our existing agreement, and addressing a range of non-tariff measures.
- Establishing new channels for dialogue and policy cooperation with China. This will allow us to address trade and economic matters important to both sides, now and into the future.
Relationship to the existing agreement
The upgrade amends rather than replaces the existing New Zealand - China Free Trade Agreement. This means that all elements of the existing agreement remain in place unless amended.