China trade agreement good for NZ
Wednesday 6 Nov 2019
After months of speculation about a deteriorating relationship with one of the world’s superpowers, the news of a successful end to trade talks may have come as a relief to the Government - not that David Parker saw it that way.
“Relief? Not really relief, I think it’s celebration really,” the Trade and Export Growth Minister told Newsroom of the agreement in substance on an upgraded China-New Zealand FTA.
As revealed by Newsroom last week, two and a half years of negotiations have finally resulted in a deal that both sides are happy with. Predictably, there are modest wins for market access. Ardern trumpeted the fact that 99 percent of New Zealand’s wood and paper trade to China would have preferential access, but 98 percent of our trade already enjoyed that status under the original FTA.
Nevertheless, the gradual elimination of tariffs on 12 additional wood and paper exports worth $36 million a year is not to be sniffed at.
The tariff safeguards on dairy exports remain untouched, which will disappoint the dairy sector but is the result of a necessary compromise of short-term pain for long-term gain.
Australia’s 2015 trade deal with China contains lower but permanent safeguard thresholds, while New Zealand’s more stringent restrictions will lift entirely by 2024.
Industry groups like DCANZ had accepted the longer-term superiority of New Zealand’s arrangement but warned of a growing disadvantage with Australian exporters until then.
With little leverage to get the best of both worlds, the more cautious route is, on balance, probably the best.
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