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Hopes of fast FTA benefits for NZ

The Dominion Post

Hopes of fast FTA benefits for NZ

By Andrew Janes

4 April 2008

Business leaders are optimistic that the free trade agreement with China will be comprehensive and have quicker phaseout periods for tariffs than a similar pact New Zealand signed with Thailand in 2005.

Details of the deal will be made public on Monday after the signing ceremony in Beijing.

Wellington Chamber of Commerce chief executive Charles Finny, who was previously on the Foreign Affairs and Trade Ministry’s China free trade agreement negotiating team, said it looked as if tariffs on New Zealand merchandise exports to China would be phased out to zero on most goods.

"I expect to see good liberalisation."

The agreement would also contain rules on services and investment that would be better than current World Trade Organisation commitments, Mr Finny said.

"In areas where we have not quite got what we want, we will have most-favoured-nation status.

So if someone else subsequently negotiates something more favourable in a certain area, we’ll get it as well."

Critical to the FTA will be the length of phaseout periods on Chinese tariffs in key New Zealand exporting sectors.

At present China imposes tariffs of 10 per cent on milk powder, 15 per cent on butter, cheese and yoghurt, 12 per cent on beef, 12 to 20 per cent on sheepmeat, up to 20 per cent on kiwifruit and 9 per cent to 30 per cent on manufactured goods.

"If you could get to zero tariffs in some of those key areas within 10 years, you’d be doing quite well," Export NZ chief executive Bob Walters said.

He was hoping the phaseout times would be quicker than with the Thailand deal, under which some tariffs will not get to zero till 2020 or 2025.

Both Employers and Manufacturers Association (Northern) president Alasdair Thompson and Federated Farmers head Charlie Pedersen said they were expecting a comprehensive deal that would benefit New Zealand.

Meat and Wool New Zealand chairman Mark Petersen said wool had taken up quite a lot of time in the negotiations. China has an international quota for wool imports and last year bought no New Zealand wool, Mr Petersen said.

Mr Finny said it was likely there would be some special quota arrangements for wool.

On the import side, Council of Trade Unions economist Peter Conway said the CTU had been pushing for the longest possible phase-down period for New Zealand tariffs.

The only areas in which New Zealand still imposes tariffs on are clothing and footwear ( 15 per cent) and textiles, carpets and whiteware (15-17 per cent).

"We’re confident the Government has listened to us, although we expect New Zealand tariffs will go to zero before Chinese tariffs," Mr Conway said.

He also expected a labour memorandum in the FTA covering issues such as child labour and the right of Chinese workers to unionise.

"The key issue for us will be has it got teeth and will it be effective if we want to raise a complaint?"

The CTU was also concerned about New Zealand making binding commitments on accepting temporary migrants from China.

"We would prefer migration issues to be kept separate from trade."