New Zealand China Free Trade Agreement
Encyclopedia
The New Zealand – China Free Trade Agreement is a bilateral free trade
agreement signed between the People's Republic of China
and New Zealand
in April 2008. It is the first free trade agreement that China has signed with any developed country
, and New Zealand's largest trade deal since the 1983 Closer Economic Relations
agreement with Australia
. The New Zealand-China FTA was signed on 7 April 2008 in Beijing
, after negotiations that spanned fifteen rounds over three years. It entered into force on 1 October 2008, after ratification
by the New Zealand Parliament. The provisions of the agreement are expected to be phased in gradually over 12 years, fully coming into force in 2019.
The deal also allows 1,800 specialised workers to go from China to New Zealand for a period of up to three years. This however will be limited to approved occupations and to a maximum of 100 such workers in any sector, except for traditional Chinese medicine practitioners, Chinese chefs, and Mandarin teaching aides, which have maximums of 150 or 200. New Zealand will also establish a working holiday scheme enabling up to 1,000 young Chinese nationals annually to travel and work in New Zealand for up to 12 months. Both countries have agreed to enhance business visa conditions and processing.
and the New Zealand Seafood Industry Council, while others such as the appliance manufacturer Fisher & Paykel
stated that the deal would lead to tougher competition with cheaper-priced Chinese products. The New Zealand Council of Trade Unions
opposed the inclusion of workforce in the trade agreement stating that there is potential for skilled Chinese workers to be exploited and underpaid.
While the FTA enjoys the support of New Zealand's two largest political parties, Labour
and National
, the Green Party
and the Māori Party
opposed the agreement even before it was signed. Members of the Green Party
protested against the signing of the deal, Keith Locke
saying that easier access to cheap Chinese workforce could undermine New Zealand workers. Following the signing, New Zealand First
announced that it opposed the deal. Public opinion has been divided; a poll published a week before the signing showed 45% supported the deal, while 32% opposed it.
and President of the People's Republic of China
, Hu Jintao
announced the commencement of negotiations towards an FTA at the APEC Leaders meeting in Santiago
, Chile
. The first round of negotiations was held in December 2004. Fifteen rounds took place before the FTA was signed in April 2008 by New Zealand's Minister of Trade Phil Goff
and the Chinese Minister of Commerce Chen Deming
at the Great Hall of the People
in Beijing
.
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
agreement signed between the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
and New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
in April 2008. It is the first free trade agreement that China has signed with any developed country
Developed country
A developed country is a country that has a high level of development according to some criteria. Which criteria, and which countries are classified as being developed, is a contentious issue...
, and New Zealand's largest trade deal since the 1983 Closer Economic Relations
Closer Economic Relations
Closer Economic Relations is a free trade agreement between the governments of New Zealand and Australia. It is also known as the Australia New Zealand Closer Economic Relations Trade Agreement and sometimes shortened to...
agreement with Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
. The New Zealand-China FTA was signed on 7 April 2008 in Beijing
Beijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...
, after negotiations that spanned fifteen rounds over three years. It entered into force on 1 October 2008, after ratification
Ratification
Ratification is a principal's approval of an act of its agent where the agent lacked authority to legally bind the principal. The term applies to private contract law, international treaties, and constitutionals in federations such as the United States and Canada.- Private law :In contract law, the...
by the New Zealand Parliament. The provisions of the agreement are expected to be phased in gradually over 12 years, fully coming into force in 2019.
Agreements
Under the agreement, 37 per cent of Chinese exports to New Zealand and 35 per cent of New Zealand exports to China will be tariff free by October 2008. All tariffs for Chinese exports to New Zealand will be eliminated by 2016, and 96 per cent of New Zealand exports to China will be tariff free by 2019. Mutual investment and trade in services will also be facilitated.The deal also allows 1,800 specialised workers to go from China to New Zealand for a period of up to three years. This however will be limited to approved occupations and to a maximum of 100 such workers in any sector, except for traditional Chinese medicine practitioners, Chinese chefs, and Mandarin teaching aides, which have maximums of 150 or 200. New Zealand will also establish a working holiday scheme enabling up to 1,000 young Chinese nationals annually to travel and work in New Zealand for up to 12 months. Both countries have agreed to enhance business visa conditions and processing.
New Zealand
The deal was welcomed by a number of New Zealand exporters including the dairy cooperative FonterraFonterra
Fonterra Co-operative Group Limited is a New Zealand multinational dairy co-operative owned by almost 10,500 New Zealand farmers. The company is responsible for approximately 30% of the world's dairy exports and with revenue exceeding NZ$19.87 billion, is New Zealand's largest company.- History :In...
and the New Zealand Seafood Industry Council, while others such as the appliance manufacturer Fisher & Paykel
Fisher & Paykel
Fisher & Paykel is a major appliance manufacturing company based in East Tamaki, New Zealand.Originally an importer of domestic refrigerators, Fisher & Paykel now holds over 420 patents and bases its identity on innovative design, particularly in the areas of usability and environmental...
stated that the deal would lead to tougher competition with cheaper-priced Chinese products. The New Zealand Council of Trade Unions
New Zealand Council of Trade Unions
The New Zealand Council of Trade Unions is a national trade union center in New Zealand. The NZCTU represents 360,000 workers, and is the largest democratic organisation in New Zealand....
opposed the inclusion of workforce in the trade agreement stating that there is potential for skilled Chinese workers to be exploited and underpaid.
While the FTA enjoys the support of New Zealand's two largest political parties, Labour
New Zealand Labour Party
The New Zealand Labour Party is a New Zealand political party. It describes itself as centre-left and socially progressive and has been one of the two primary parties of New Zealand politics since 1935....
and National
New Zealand National Party
The New Zealand National Party is the largest party in the New Zealand House of Representatives and in November 2008 formed a minority government with support from three minor parties.-Policies:...
, the Green Party
Green Party of Aotearoa New Zealand
The Green Party of Aotearoa New Zealand is a political party that has seats in the New Zealand parliament. It focuses firstly on environmentalism, arguing that all other aspects of humanity will cease to be of concern if there is no environment to sustain it...
and the Māori Party
Maori Party
The Māori Party, a political party in New Zealand, was formed on 7 July 2004. The Party is guided by eight constitutional "kaupapa", or Party objectives. Tariana Turia formed the Māori Party after resigning from the Labour Party where she had been a Cabinet Minister in the Fifth Labour-led...
opposed the agreement even before it was signed. Members of the Green Party
Green Party of Aotearoa New Zealand
The Green Party of Aotearoa New Zealand is a political party that has seats in the New Zealand parliament. It focuses firstly on environmentalism, arguing that all other aspects of humanity will cease to be of concern if there is no environment to sustain it...
protested against the signing of the deal, Keith Locke
Keith Locke
Keith James Locke is a current New Zealand MP representing the Green Party who was first elected to parliament in 1999. he is the Green Party spokesperson on Foreign Affairs, Defence, Ethnic Affairs, Pacific Affairs, Human Rights, Immigration, Police and Auckland Transport...
saying that easier access to cheap Chinese workforce could undermine New Zealand workers. Following the signing, New Zealand First
New Zealand First
New Zealand First is a political party in New Zealand that was founded in 1993, following party founder Winston Peters' resignation from the National Party in 1992...
announced that it opposed the deal. Public opinion has been divided; a poll published a week before the signing showed 45% supported the deal, while 32% opposed it.
History
The agreement has taken over three years to negotiate. On 19 November 2004, Helen ClarkHelen Clark
Helen Elizabeth Clark, ONZ is a New Zealand political figure who was the 37th Prime Minister of New Zealand for three consecutive terms from 1999 to 2008...
and President of the People's Republic of China
President of the People's Republic of China
The President of the People's Republic of China is a ceremonial office and a part of State organs under the National People's Congress and it is the head of state of the People's Republic of China . The office was created by the 1982 Constitution...
, Hu Jintao
Hu Jintao
Hu Jintao is the current Paramount Leader of the People's Republic of China. He has held the titles of General Secretary of the Communist Party of China since 2002, President of the People's Republic of China since 2003, and Chairman of the Central Military Commission since 2004, succeeding Jiang...
announced the commencement of negotiations towards an FTA at the APEC Leaders meeting in Santiago
Santiago, Chile
Santiago , also known as Santiago de Chile, is the capital and largest city of Chile, and the center of its largest conurbation . It is located in the country's central valley, at an elevation of above mean sea level...
, Chile
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...
. The first round of negotiations was held in December 2004. Fifteen rounds took place before the FTA was signed in April 2008 by New Zealand's Minister of Trade Phil Goff
Phil Goff
Philip Bruce Goff is the current Leader of the Opposition and the Leader of the New Zealand Labour Party. During the Fifth Labour Government, he served in a number of ministerial portfolios, including Minister of Defence of New Zealand, Minister of Corrections, Minister of Foreign Affairs and...
and the Chinese Minister of Commerce Chen Deming
Chen Deming
Chen Deming is the Minister of the Chinese Ministry of Commerce. He was appointed to the post at the Standing Committee of the National People's Congress on December 29, 2007.-Biography:...
at the Great Hall of the People
Great Hall of the People
The Great Hall of the People is located at the western edge of Tiananmen Square, Beijing, People's Republic of China, and is used for legislative and ceremonial activities by the People's Republic of China and the Communist Party of China. It functions as the People's Republic of China's...
in Beijing
Beijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...
.
See also
- Comprehensive Economic Partnership for East AsiaComprehensive Economic Partnership for East AsiaThe Comprehensive Economic Partnership for East ASIA is a Japanese led proposal for trade co-operation, free trade agreement, among the 16 present member countries of the East Asia Summit.- Countries involved :The 16 countries are:...
- Sino-New Zealand relationsSino-New Zealand relationsSino-New Zealand relations, bilateral relations between New Zealand and the People's Republic of China, are excellent, with ever greater trust being developed and shared between the two countries...
- New Zealand free trade agreementsNew Zealand free trade agreementsNew Zealand is party to several free trade agreements worldwide.-History:The Economy of New Zealand is a market economy which is greatly dependent on international trade, mainly with Australia, the United States of America, China and Japan. It is strongly dependent on tourism and agricultural...
- History of trade for the People's Republic of ChinaHistory of trade for the People's Republic of ChinaTrade has been a very significant factor of the People's Republic of China's economy. In the twenty-five years that followed the founding of the People's Republic of China in 1949, China's trade institutions were built into a partially modern but somewhat inefficient system...
External links
- New Zealand - China Free Trade Agreement, New Zealand Ministry of Foreign Affairs and Trade
- Full text of New Zealand - China Free Trade Agreement, New Zealand Ministry of Foreign Affairs and Trade