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NZ leads race to China trade deal

New Zealand Herald, Auckland

NZ leads race to China trade deal

By Grant Fleming

18 June 2007

GUANGZHOU - Rows of container cranes dominate the hazy skyline of Yantian.

The port, in China’s southern Guangdong province, is the world’s fourth busiest - despite few New Zealanders probably even having heard of it.

Nearby, diggers are busy widening the highway and a scaffolding structure the size of an apartment block sits around several eight-storey-high concrete pillars, which will soon support a new elevated section of railway.

China’s unbridled growth has become an increasingly familiar image in the minds of Westerners as their governments rush to hitch their wagon to the country’s burgeoning economy.

New Zealand is leading the pack.

It was the first developed country to enter into free-trade negotiations with China and last week completed the 12th round of talks.

Officials estimate a "good-quality, comprehensive" agreement could boost the New Zealand economy by $240 million to $370 million a year through greater market access and tariff reductions.

Former trade negotiator and now National Party trade spokesman Tim Groser says the signing of a deal could lead to even greater indirect benefits.

"It will send a major signal to Chinese that New Zealand is okay. That might sound vague, but China is a very centralised society and ... big signals in such a society influence behaviour.

"Therefore, the FTA [free trade agreement] is a bit more than just a tariff negotiation. It will send an unmistakable signal to China Inc that the Chinese authorities are comfortable with New Zealand, and I expect that to bring as many benefits as the harder-line negotiations will produce."

But critics say the looming deal - expected to be completed by next April - should not blinker New Zealanders to China’s poor human rights or environmental record.

Amnesty International spokesman Gary Reese says New Zealand should be applying pressure on China to improve that record through its free-trade negotiations.

Mr Reese said regularly occurring abuses included trials without due process, confessions gained under torture, forced "re-education" labour camps, suppression of religious movements such as Falun Gong and repression of minority groups, particularly the Tibetan and Muslim Uighur people.

As well, there were strong indications of a growing export trade in human organs - aided and abetted by local officials - from the estimated 15,000 people sentenced to death each year.

Mr Reese said Amnesty was not opposed to a free-trade deal but believed human rights issues must form part of New Zealand’s agreement, which would be a precedent setter for other developed countries.

Greens co-leader and trade spokesman Russel Norman went further - New Zealand should back out of any deal that did not include explicit and binding clauses on human rights, labour standards and the environment.

He said the idea of a deal already had some significant downsides, including likely manufacturing job losses in New Zealand as the last remaining tariffs on goods such as clothing - which were about 10 per cent - were removed

If a deal went ahead China, which would be the world’s largest polluter by 2010, should be pressured to adopt binding emissions targets under the Kyoto Protocol, which as a developing nation it was exempt from.

Dr Norman said there should be a particular focus on China meeting minimum International Labour Organisation (ILO) standards, such as freedom of association and the abolition of forced and child labour.

A spokesman for Trade Minister Phil Goff said New Zealand would stick to its 2001 Framework for Integrating Labour Issues into Free Trade Agreements, which stated agreements should promote "decent work" and should not undermine the ILO’s principles.

In previous agreements, such as one with Thailand, a bilateral committee was set up, through which any labour issues or complaints could be raised and discussed.

Dr Norman said such committees were a public relations exercise that, in reality, did little to raise standards.

"We are participating in a kind of global race to the bottom and we are not helping to put pressure on improving human rights, environmental and labour standards in China."

But Mr Groser believed negotiators had the balance about right.

He said it would be naive to believe New Zealand could effectively pressure a country the size of China to change its behaviour and it would be completely self-defeating to withdraw from a trade deal on the basis of moral principle. "The point is only First World countries can afford First World labour standards and that’s a reality some idealists just want to gloss over."

But he said China had started the journey towards first-world status and as it developed so would the labour, democratic and human rights of its citizens.

China FTA

* For: $240-$370 million boost for New Zealand economy.

* Against: China’s record on human rights.