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Goff’s slow boat to China

Dominion Post, Wellington

Goff’s slow boat to China

9 March 2006

By Sue Allen and NZPA

A comprehensive and high-quality free trade deal with China will not be sacrificed for one that is "quick and dirty", Trade Minister Phil Goff says.

The negotiations are taking place amid reports of staff shortages at the Foreign Affairs and Trade Ministry. At its annual review, Parliament’s foreign affairs, defence and trade committee said the ministry had underspent its budget last year by $3.7 million, mainly because it was short of staff.

The ministry faced its most difficult staffing problems in trade negotiations and policy areas.

Two recruiting rounds relieved pressure but, despite appointing 27 policy officers, it was still short of senior personnel, the committee said.

The revelation came as the sixth round of negotiations on the China-New Zealand free trade agreement began in Beijing this week.

Mr Goff said both nations wanted New Zealand to be the first developed country to conclude an agreement. But he confirmed no end date was in sight. Talks started in December 2004.

Mr Goff said talks were now moving on to substantive issues and both sides were looking at transitional arrangements for sensitive industries such as China’s agriculture and New Zealand’s textiles and clothing.

"We want it to be a comprehensive agreement, a high-quality free trade agreement and we would rather. . . not sacrifice those things to a quick and dirty agreement," Mr Goff said.

"What we are seeking is to have an outcome where the tariffs and goods are eliminated entirely, but we acknowledge that’s not something you necessarily achieve overnight."

China is New Zealand’s fourth largest trading partner, every year taking about $1.6 billion of New Zealand’s merchandise exports and more than $1 billion of services.

The average tariff rate is about 14 per cent, adding about $110 million in export costs and acting as a barrier to New Zealand goods entering China.

A deal is expected to add between $240 million and $280 million to the New Zealand economy over 20 years and to increase exports by up to 40 per cent.

At the moment the outline of the deal covers goods, services and investment. It also covers rules of origin, trade remedies, intellectual property and government procurement, among other things.

The Government has come under fire for concluding a deal with Thailand last year that failed to include services, despite these being a significant export.

The China free trade deal is part of a hectic schedule of trade talks. Last week, a four-way deal with Brunei, Chile and Singapore started on its final passage through Parliament.

Talks are under way with Malaysia and Hong Kong and between New Zealand, Australia and the Association of South East Asian Nations, or Asean. The 10 Asean countries include six of New Zealand’s top 20 export destinations - Malaysia, the Philippines, Indonesia, Thailand, Singapore and Vietnam.

There is talk of creating a trading bloc between New Zealand, Australia, Asean and East Asian countries such as Korea and China - a grouping that would rival Europe and the United States for trading clout.

The next bout of World Trade Organisation talks will come this weekend when G8 countries - the trading superpowers of France, Japan, the United States, Canada, Germany, Italy, Russia and Britain - meet.

Two-way trade deals have been in place with Australia since 1983, Singapore since 2001 and Thailand since 2005.