© Reuters. New Zealand Prime Minister Ardern speaks to the media after a debate in Auckland
From Praveen Menon
WELLINGTON (Reuters) – China and New Zealand signed a treaty on Tuesday to improve their existing free trade pact that gives Pacific commodity exports better access to the world's second largest economy.
New Zealand Prime Minister Jacinda Ardern confirmed the signing of the agreement at a press conference Tuesday, highlighting the deal's importance amid a crippling pandemic and global economic crisis.
The pact has been discussed for years and was concluded in November 2019, but is still before China's official signature.
New Zealand Trade Minister Damien O’Connor signed the upgrade agreement in Wellington during a "virtual signing ceremony" with Chinese Trade Minister Wang Wentao, who was in Beijing.
New Zealand said the deal "modernizes" the existing free trade agreement with China and ensures that it will remain functional for another decade.
This makes it easier to export to China and should reduce compliance costs for New Zealand exports by millions of dollars annually.
The upgrade will also mean 99% of New Zealand's timber and paper trade worth nearly NZ $ 3 billion (US $ 2.16 billion) into China will be given duty-free access, O’Connor said in a statement.
The agreement benefits New Zealand exporters of perishable goods such as seafood, forestry and other primary-sector industries.
The existing conditions for dairy products have been maintained, with all protective tariffs being abolished for most products within one year and for milk powder within three years.
"This means that by January 1, 2024 all New Zealand milk exports to China will be duty-free," said O’Connor.
New Zealand was the first developed country to sign a free trade agreement with China in 2008, which Beijing has long touted as an example of novelty with Western countries.
China is now New Zealand's largest trading partner with annual two-way trade of over NZ $ 32 billion (US $ 21.58 billion).
Relations, however, were put to the test under the von Ardern administration when New Zealand criticized China's influence on small Pacific islands and raised human rights concerns against Muslim Uyghurs 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 comes about when Beijing's relations with neighboring Australia deteriorated after Canberra called for an independent investigation into the causes of the coronavirus pandemic, first reported in central China.
Australia has called on the World Trade Organization to review China's decision to impose high tariffs on Australian barley imports.
New Zealand, which will host the Asia-Pacific regional economic cooperation summit this year, has said it is ready to help negotiate a ceasefire between China and Australia.
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