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.
- 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. Read the New Zealand-China FTA upgrade brochure [PDF, 519 KB].
The upgrade provides an opportunity to modernise the FTA and make improvements that further free up trade for goods and services to help exporters reach $30 billion in two-way trade by 2020 — the target set by leaders in 2014.
The scope of negotiations was agreed by New Zealand’s Trade Minister Todd McClay and China’s then-Commerce Minister Gao Hucheng in November 2016. Their Joint Statement identifies nine areas for negotiation:
Technical barriers to trade (TBT)
Customs procedures, cooperation and trade facilitation
Rules of origin (RoO)
In addition, both countries will also be able to raise other important issues.
Ministers agreed that negotiators would move swiftly to complete the upgrade, though no timeframe has yet been set for conclusion.
Read the full text of the Joint statement between New Zealand and the People ’s Republic of China on the upgrade of the China-New Zealand free trade agreement [PDF, 318 KB].
The second round of FTA upgrade negotiations took place on 3-6 July in Beijing. New Zealand represented by a similar inter-agency delegation to Round One.
Building on the foundations established in April, Round Two provided an opportunity for each side to begin to share more detail on their priorities for the upgrade.
All nine working groups met, with New Zealand sharing concrete ideas on what each area should address. Good progress was made, particularly on trade facilitation (customs procedures and rules of origin), technical barriers to trade issues, and competition policy. A range of next steps have been agreed that should mean formal texts and proposals across almost all areas will be exchanged before Round Three.
Lead Negotiators also discussed other areas, including legal and sensitive issues, such as goods market access, investment, and temporary entry/visa issues.
It is expected that round three will be held before the end of the year.
The first round of negotiations was held in Beijing over 25-27 April 2017. New Zealand’s delegation was made up of representatives from the Ministry of Foreign Affairs and Trade (MFAT), Ministry of Business, Innovation and Employment ( Ministry for Environment, Ministry for Primary Industries, and the New Zealand Customs Service.
The meeting was opened by China’s Ministry of Commerce (MOFCOM) Director General, supported by China’s lead negotiator for the FTA upgrade.
Over the three-day round, negotiators discussed:
- progress on the FTA’s implementation to date
- recent regulatory reform and trade policy developments (including outcomes in China and New Zealand’s recent FTAs)
- provided an overview of key issues each side was interested to discuss in negotiations.
New Zealand highlighted three issues it would be raising in upgrade negotiations:
- non-tariff barriers affecting goods trade
- market access for services exporters
- and digital trade.
We also provided an overview of New Zealand’s refreshed trade policy strategy — Trade Agenda 2030 — and New Zealand’s approach to public engagement on trade policy and FTA negotiations.
Lead negotiators also agreed to establish expert working groups for the nine areas listed above. These working groups met for the first time at Round One and agreed to share further information in June and July.
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 particularly like to hear from New Zealand companies currently engaged in trade or investment with China, and from companies with an interest in doing so in the future. We are especially interested in hearing about regulatory barriers that are impeding the growth or development of your trade and investment links with China.
Get in touch
To get involved with the FTA upgrade process, or register your interest in upcoming consultation and public events, you can:
- phone MFAT’s exporter helpline — 0800 824 605
- send us a letter — Coordinator — China FTA Upgrade, Ministry of Foreign Affairs and Trade, Private Bag 18-901, Wellington
- email us — China.FTA@mfat.govt.nz
In April 2015, during the Joint Assessment Working Group process, we 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 (2016)
China GDP: US$11.2 trillion (2016)
GDP per capita: US$8,113 (2016)
New Zealand’s major goods exports to China: dairy (milk powder, butter and cheese), wood products, 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]
Implementing Arrangement 1 [PDF, 105 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).