WELLINGTON - China and New Zealand signed a deal to upgrade their existing free trade pact on Tuesday, which will give commodities exports from the Pacific nation increased access to the world's second-largest economy.
New Zealand Prime Minister Jacinda Ardern confirmed the signing of the agreement at a news conference on Tuesday, noting the significance of the deal amid a crippling pandemic and global economic crisis.
New Zealand trade minister Damien O’Connor signed the upgraded agreement in Wellington through a "virtual signing ceremony" with Chinese commerce minister Wang Wentao, who was in Beijing.
New Zealand said the agreement "modernises" the existing free trade agreement with China and ensures it remains fit for purpose for another decade.
It makes exporting to China easier and is expected to reduce compliance costs for New Zealand exports by millions of dollars each year.
The upgrade will also mean that 99% of New Zealand’s nearly NZ$3 billion ($2.16 billion) wood and paper trade to China will be granted tariff-free access, O’Connor said in a statement.
The deal will benefit New Zealand exporters of perishable goods such as seafood, the forestry sector, and other primary sector industries.
Existing conditions for dairy products have been maintained, with all safeguard tariffs to be eliminated within one year for most products, and three years for milk powder.
"This means that by 1 January 2024, all New Zealand dairy exports to China will be tariff free," O’Connor said.
New Zealand was the first developed country to sign a free trade agreement with China in 2008, which has long been touted by Beijing as an exemplar of firsts with Western countries.
China is now New Zealand’s largest trading partner, with annual two-way trade of over NZ$32 billion ($21.58 billion).
But ties have been tested under Ardern's government as New Zealand criticised China’s influence on small Pacific islands and raised human rights concerns about Muslim Uighurs in Xinjiang. Ardern also backed Taiwan’s participation at the World Health Organization (WHO) despite a warning from Beijing.
The trade pact with New Zealand also comes as Beijing's ties with neighbouring 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 hefty tariffs on imports of Australian barley.
New Zealand, which will host the regional Asia Pacific Economic Cooperation summit this year, has said it would be willing to help negotiate a truce between China and Australia.
($1 = 1.3914 New Zealand dollars)
(Reporting by Praveen Menon; Editing by Aurora Ellis and Sam Holmes) ((email@example.com; +6448028163; Reuters Messaging: firstname.lastname@example.org; Twitter: https://twitter.com/Journopraveen))