Upgrading the free trade agreement with China is part of the New Zealand government's overall efforts to rebuild its economy after the epidemic. Damien O'Connor, Minister of trade and export growth of New Zealand, announced that the updated version of the free trade agreement with China will enter into force on April 7, 2022.
The date was agreed during a video meeting between Chinese Commerce Minister Wang Wentao and Damien O'Connor last week. In 2008, New Zealand became the first developed country to sign a free trade agreement with China. The document was modernized and revised in January 2021, when the two sides signed relevant agreements. Among them, it simplifies the export of goods to China and greatly reduces the trade cost due to the elimination of tariffs. For example, tariff cuts for 12 additional wood and paper products are estimated at about $30 million. According to the new agreement, 99% of the wood and paper worth more than $4 billion will be transported to the Chinese market duty-free.
Damien O'Connor said that New Zealand enterprises will benefit from the modern rules of trade with China. He revealed that as of June 2021, the export of goods and services between China and New Zealand had reached US $20.1 billion. The New Zealand Minister stressed the good momentum of the trade plan with China. According to his prediction, New Zealand's major industrial exports to China this year alone will reach a record $50 billion. The updated agreement includes new chapters on e-commerce, competition policy, public procurement and the environment. Especially in the updated version of the agreement, China has undertaken the highest level of commitments it has agreed to in any other free trade area.
Chen Hong, director of the New Zealand research center of East China Normal University, said that this fact shows that China is a firm advocate and supporter of free trade and resolutely opposes trade protectionism and trade barriers. The upgrading of the China New Zealand Free Trade Agreement will effectively promote bilateral economic and trade cooperation and greatly benefit the two peoples.
The smooth implementation of the free trade agreement has created good conditions for updating the free trade agreement. It made China the largest trading partner of New Zealand in 2017 and has maintained this high level. Together with timber, meat and tourism services, dairy products have become the main commodities exported by New Zealand to China. Since January 1, 2022, most dairy products from New Zealand have been transported to China duty-free for the first time. Based on current exports, this is expected to save New Zealand an additional $180 million a year.
New Zealand and China have successfully lifted trade in goods and services from the shadow of political differences. This is why we support the development of free trade and mutual benefit. Both China and Singapore are members of the regional comprehensive economic partnership agreement (RCEP), which came into force this year, and both expect to reap tangible benefits from it.