New Zealand Prime Minister Jacinda Ardern has a meeting with Chinese Prime Minister Li Keqiang in the Great Hall of the People in Beijing, China, on April 1, 2019.
Naohiko Hatta | Pool | Kyodo News | Getty Images
China and New Zealand signed an agreement to update their existing free trade pact on Tuesday, which will give Pacific country’s commodity exports greater 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 importance of the agreement amid a devastating pandemic and global economic crisis.
The pact has been discussed for years and was completed in November 2019, but awaited China’s official signature.
New Zealand Commerce Minister Damien O’Connor signed the updated agreement in Wellington through a “virtual signing ceremony” with Chinese Commerce Minister Wang Wentao, who was in Beijing.
New Zealand said the agreement “modernizes” the existing free trade agreement with China and ensures that it remains fit for its goals for another decade.
It facilitates export to China 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) of trade in wood and paper with China will have tariff-free access, O’Connor said in a statement.
The deal will benefit New Zealand’s exporters of perishable products such as seafood, the forestry sector and other industries in the primary sector.
The 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 powdered milk.
“This means that by January 1, 2024, all New Zealand dairy exports to China will be free of tariffs,” said O’Connor.
New Zealand was the first developed country to sign a free trade agreement with China in 2008, which Beijing has long cited as an example of pioneering with Western countries.
China is now New Zealand’s largest trading partner, with annual bilateral trade of more than NZ $ 32 billion ($ 21.58 billion).
But the ties were tested under the Ardern government, while New Zealand criticized China’s influence on the small Pacific islands and raised human rights issues about Muslim Uighurs in Xinjiang. Ardern also supported Taiwan’s participation in the World Health Organization (WHO), despite a warning from Beijing.
The trade pact with New Zealand also occurs when Beijing’s ties to neighboring Australia deteriorate after Canberra calls for an independent investigation into the origins of the coronavirus pandemic, which was first reported in central China.
Australia called on the World Trade Organization to review China’s decision to impose heavy tariffs on Australian barley imports.
New Zealand, which will host the Asia-Pacific regional economic cooperation summit this year, said it would be willing to help negotiate a truce between China and Australia.