Upgraded China-New Zealand FTA sets a global example

The protocol to upgrade the free trade agreement between China and New Zealand will officially enter into force on April 7. The China-New Zealand FTA signed in 2008 is the first free trade agreement signed between China and a developed country, and the upgrading of the agreement is of great significance on the 50th anniversary of China-New Zealand relations.

What will the FTA actually upgrade?

The upgrade protocol will revise the original FTA, refining five areas of the original agreement, namely rules of origin, customs procedures and trade facilitation, technical barriers to trade, trade in services and cooperation, and adding four new areas - e-commerce, government procurement, competition policy and environment and trade. In addition, the two sides have also reached consensus on China's new investment, new employment arrangements for featured industries, cosmetics' trade and tariff concessions for wood and paper products through four exchanges of texts.

What will the upgrading deliver to China and New Zealand?

Most obviously, Chinese and New Zealand companies will enjoy a broader development prospect and a more favorable business environment, and will have more confidence in future development. The upgrading has created favorable conditions for cross-market allocation of various economic factors, enabling enterprises of the two countries to give full play to their respective advantages and respond to market demands.

A notable point in the upgraded protocol is that New Zealand will ease the threshold for Chinese investment, giving Chinese investors the same threshold treatment as members of the Comprehensive and Progressive Trans-Pacific Partnership. This will help reduce institutional transaction costs for enterprises to carry out investment, and further increase the enthusiasm of companies for cooperation. More Chinese investment to New Zealand will drive economic growth and create a large number of jobs.

People will have a better consumption experience. Upgrading the FTA between China and New Zealand means trade facilitation, directly enriching the consumption choices of the two peoples and improving the living standard. New Zealanders will be able to enjoy a wider range of higher quality Chinese goods, such as electronics and furniture at lower prices.

The cooperation on combating climate change between China and New Zealand will be improved. A new environment and trade clause has been included in the upgraded FTA, and the two sides have reached consensus on environmental protection, strengthening environmental law enforcement and implementing multilateral environmental conventions, even exceeding RCEP.

China is New Zealand's largest trading partner. According to statistics, bilateral trade in 2021 increased by 36 percent over the previous year at a time when the global economy was getting battered by the COVID-19 pandemic. The upgraded FTA will ensure that New Zealand remains flexible and competitive in the largest and most important trading market, and it could be part of the New Zealand government's trade recovery strategy in response to the impact of the pandemic. It could also be conducive to China's economic growth and an important part of the strategy of upgrading China's free trade zone. It will enrich the China-New Zealand comprehensive strategic partnership and push the cooperation between the two countries to a higher level.

What will the upgrading of FTA bring to the world?

The implementation of the upgraded FTA will also greatly stimulate global economy. With the COVID-19 pandemic raging, all countries are facing a huge challenge of economic recovery. The upgraded FTA has set a good example for global economic and trade cooperation, which has boosted the confidence of the international market and injected impetus into the world economic recovery.

Both China and New Zealand are champions of multilateralism and free trade. In the past few years, some countries have taken misguided measures such as unilateralism and trade protectionism, causing significant damage to the global trade. The upgrading of the FTA between China and New Zealand shows the firm determination of both sides to support multilateralism and free trade with concrete actions and the tremendous efforts made to build an open world economy.

The door of China's opening up will not be closed, but will only open wider and wider. China will unswervingly pursue a win-win strategy of opening up and implement a high-level policy of trade and investment liberalization and facilitation. The upgrading of FTA is not the ultimate goal. China and New Zealand have agreed to carry out follow-up negotiations especially on trade in services. Let us look forward to a better shared future for China-New Zealand relations and cooperation as well as the recovery and growth of global economy.

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