MPs to vote for deal on China

Dominion Post, Wellington

MPs to vote for deal on China

By Tracy Watkins and Emily Watt

31 March 2008

A free trade agreement with China looks set to win the overwhelming backing of Parliament.

But the timing is controversial, with the signing ceremony coming on the back of bloodshed in Tibet. The Government could be courting a public backlash after refusing to release details of the trade deal till Prime Minister Helen Clark arrives in Beijing next week.

It appears that just 20 working days will be allowed for the public to have their say, despite the China FTA being New Zealand’s biggest and most significant bilateral deal since closer economic relations with Australia 25 years ago.

Miss Clark confirmed yesterday that the deal would be signed next Monday in Beijing, after weeks of diplomatic tiptoeing around publicly announcing the date.

The deal appears to be supported by nearly every party in Parliament, with just the Greens opposing and NZ First reserving it position till it sees the detail.

It is expected to be a boon to our exporters, valued at between $180 million and $280 million a year in preliminary studies.

It is significant because there has been a race to become the first Western nation to do a trade deal with China, and Australia is not far behind. Australian Prime Minister Kevin Rudd is due to fly into Beijing within days of Miss Clark’s trip.

One of the biggest trade delegations to leave New Zealand in years has been assembled for the signing; 150 representatives of some of our biggest businesses, including Fonterra, will travel to Beijing. But the size of the contingent could swell close to 200 once ministers, officials, local government and media representatives are included.

Miss Clark told TVNZ’s Agenda yesterday the deal would give New Zealand the advantage over other trading nations in meeting the growing demand for high-value exports among China’s affluent middle class.

"That middle class will grow in size, that middle class wants to travel to places like New Zealand, it wants to educate its children in places like New Zealand, it wants to buy high-quality software, designer clothes."

The deal is likely to phase out tariffs in key areas and the Government is understood to have resisted Chinese efforts for freer rules surrounding the movement of labour. The deal will, however, open the door to more Chinese specialists in niche occupations, such as acupuncture.

Green MP Keith Locke said that as China faced international condemnation over Tibet it sought legitimacy through such trade deals.

"It is gaining the endorsement of a liberal Western nation. That’s what they value about it," Mr Locke said.

He called for more than 20 working days to scrutinise the deal.

There is a massive trade imbalance between the countries. In 2005, China exported $3.6 billion in goods to New Zealand, compared with just $1.5 billion in the other direction.

New Zealand goods face average tariffs of about 9.5 per cent on entering China - but in the case of agriculture imports, the average tariff is more than 15 per cent.

Tariffs on Chinese goods entering New Zealand are low by comparison. Ninety-five per cent enter free of any duties, while the remaining tariffs on clothing, footwear and carpets are due to fall to 10 per cent by 2009.

They could go altogether under the deal, raising fears of more job losses in industries in decline.

But Victoria University law professor Gordon Anderson said the mass manufacture of cheap clothing and shoes had shifted overseas long ago. An FTA would simply add momentum - and freeing up our exports into China, even phasing out tariffs over a number of years, was a "massive deal" for New Zealand.

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