NZ-China FTA upgrade
In a world first for any developed country, New Zealand entered into a free trade agreement with China in 2008, and with it came a unique competitive advantage. In another first, New Zealand is now the first developed country to launch an FTA upgrade with China.
- FTA upgrade negotiations
- How to get involved
- Media and resources
Today China is the world’s second largest economy and most populous country. It’s sizeable and growing middle class offer significant opportunities for New Zealand exporters and investors.
The FTA is a success story for both countries. It has created significant mutual benefits while broadening and deepening our relationship.
Goods exports to China have quadrupled since the FTA was signed and entered into force in 2008. China is now New Zealand’s second-largest trading partner, with two-way trade valued at over NZ$22 billion in 2016. This is made up of NZ$12.3 billion in exports (NZ$9.4 billion goods, NZ$2.9 billion in services), and NZ$10.5 billion in imports (NZ$10 billion goods, NZ$538 million in services).
In recent years China has risen to become New Zealand’s ninth-largest source of foreign direct investment (at NZ$1.1 billion in 2016). Tourism, education and other people-to-people links between the two countries have also grown strongly.
In another ‘first’ in the New Zealand-China relationship, then-Prime Minister John Key and President Xi Jinping agreed to upgrade the FTA in November 2016.
The first round of negotiations, to be held in Beijing over 25-27 April 2017, was announced (external link) during Premier Li Keqiang’s visit to New Zealand in March.
The upgrade provides an opportunity to modernise the FTA and make improvements that further free up trade for goods and services exporters. Negotiations will aim to enhance areas already covered by the agreement, including technical barriers to trade, customs procedures, cooperation and trade facilitation, rules of origin and services.
Both countries will also be able to raise other issues of importance to them, and will address newer areas such as competition policy and electronic commerce.
Read more: Joint Assessment Working Group Recommendations on the upgrade here (external link).
Ministers agreed that negotiators would move swiftly to complete the upgrade, though no timeframe has yet been set for conclusion.
We are keen to hear from those with an interest in the FTA upgrade negotiations, including business, Māori, non-government organisations, and members of the public.
We would like to hear from companies currently engaged in trade or investment with China, as well as those with an interest in doing so in the future. We particularly want to hear about specific issues impeding the growth or development of trade and investment links with China.
Read the upgrade brochure [PDF, 519 KB].
To provide input or seek more information about the FTA upgrade process, or register your interest in upcoming consultation and public events, you can:
- phone MFAT’s exporter helpline 0800 824 605
- email us directly
- Post mail to: Coordinator – China FTA Upgrade, Ministry of Foreign Affairs and Trade, Private Bag 18-901, Wellington.
In April 2015, during the Joint Assessment Working Group process, MFAT called for public submissions on the upgrade. This process ran until May 2015 and 17 submissions were received.
The information submitted will continue to help inform New Zealand’s priorities for the upgrade as negotiations are launched.
China population: 1.4 billion (2015)
China GDP: US$11 trillion (2015)
GDP per capita: US$8,029 (2015)
New Zealand’s major goods exports to China: dairy (milk powder, butter and cheese), wood, and meat products.
New Zealand’s major services exports to China: tourism, education, and other transportation services.
New Zealand’s major imports from China: electronics, clothing, furniture, and toys.
For more statistics about New Zealand’s trade with China, see the Statistics New Zealand fact sheet (external link).
Launched: A Joint Feasibility Report [PDF, 490 KB] was published and negotiations launched in 2004.
Signed: The FTA was signed in Beijing on 7 April 2008 and came into effect on 1 October 2008.
Implementation: Since 2008, officials have regularly met to monitor implementation of the FTA, enhance cooperation, and address issues impacting trade under the agreement.
Upgrade: Agreement to upgrade the FTA was reached in November 2016, with the first round of negotiations to be held in April 2017.
- Better market access and guarantees for New Zealand exporters and investors in China.
- Duty free access for 96% of the categories of goods New Zealand exports to China. This represented about $115.5 million in annual saving to exporters at the time of signing, though these savings have substantially risen as trade has increased. In 2017 all exports other than dairy (some products remain subject to tariffs and safeguards that will be phased out by 2024), and a small number of products that were excluded from the FTA, are eligible for tariff free access into China. In 2017 all imports from China are eligible for tariff free access.
- Future-proofing rules that ensure service exporters and investors in some sectors will benefit from any improved access that China grants to other FTA partners in the future.
- Faster and easier temporary entry to China for business people through improved visa processing.
- Greater cooperation in the areas of customs, sanitary and phytosanitary measures and intellectual property.
- Improved security of investments in China, as well as a provision to ensure that New Zealand investors enjoy the same access to China as investors from other countries
- A clear process for settling disputes.
Labour and Environment
As part of the FTA negotiations, New Zealand and China signed the Environment Cooperation Agreement and the Labour Memorandum of Understanding, which provide a forum for both countries to work together in a practical way to promote sound labour and environment policies and practices.
New Zealand and China have agreed to further discuss trade and environment issues in upgrade negotiations.
Read the Environment Cooperation Agreement [PDF, 206 KB]
Businesses trading in goods
Use the Tariff Finder (external link) to find out:
- the tariff classification for the good
- the tariff commitments
- the Rules of Origin (ROO)
- how to get a Certificate of Origin
Read the Customs fact sheets for the China FTA:
Fact Sheet #37 Rules of Origin for China (external link)
Fact sheet #38 Exporting to China (external link)
Service sector businesses
Use Annex 8 of the FTA to find out:
- how your service is classified
- if there are limits on national treatment or market access for your service
- if there are any additional commitments for your service
Read an overview of what the FTA means for services in Chapter 9 of the MFAT Guide to the Agreement [PDF, 185 KB]
Memorandum of Understanding on Labour Cooperation [PDF, 210 KB]
MFAT Guide to the NZ China FTA [PDF, 913 KB]
NZ China FTA National Interest Analysis [PDF, 327 KB]
Tariff schedules in HS2012
Tariff schedule HS2012 - New Zealand [PDF, 4.3 MB]
Tariff schedule HS2012 - China [PDF, 7.6 MB]
March 2017: Prime Minister Bill English press release announcing date of first round of FTA upgrade negotiations here (external link).
November 2016: Prime Minister John Key press release welcoming launch of FTA upgrade negotiations to China-New Zealand FTA here (external link).
November 2016: Joint ministerial statement on launch of China-New Zealand FTA upgrade negotiations here (external link).