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NZ on track to sign FTA with China

NZ on track to sign FTA with China

19 October 2006


New Zealand remains on track to be the first developed state to sign a free trade agreement (FTA) with China after completing a "business end" round of talks, a senior official said today.

The ninth round of talks - "the longest and most complex" - was completed at the weekend, said the Foreign Affairs and Trade Ministry official, who spoke on condition of anonymity.

"Overall, we are continuing to make good progress," he said.

The talks have got to the rule-making stage for goods and services. Experts from both countries thrashed out details on such issues as rules of origin and market access for goods and services.

The official said the talks were on track for completion between April 2007 and April 2008. New Zealand in 2004 was the first developed country to announce it would sign a FTA with the world’s most populous state.

Australia and Iceland are the two other developed nations currently negotiating a FTA with China but the official said New Zealand was still ahead in the race for completion.

He said the bureaucrats had received strong political backing, particularly after the visit to New Zealand in April of Chinese Premier Wen Jiabao.

The experts had been given a brief to produce a "balanced, high quality" deal and last week’s talks worked over what each side understood by those two terms.

Speaking at a briefing ahead of a major trade delegation to Shanghai next month, the official said as they got further into detail the talks got tougher, which was a natural part of the negotiating process.

He likened the process to a climber scaling a mountain and carrying oxygen as a precaution.

Asked if negotiators were using the oxygen he quipped: "We are starting to breath more heavily."

Discussions on freeing agricultural trade were crucial and tariff elimination remained New Zealand’s goal, he said.

However, New Zealand had made it clear it was prepared to accept trade "sensitivities".

Asked if the outcome would be acceptable on the agricultural front, he said: "The instruction from the leaders is for a high quality, balanced and comprehensive outcome. Those are mutual words by both leaders, so ... it’s our job to deliver those instructions from the leaders."

The next round of talks will be in late January or early February although there were would be more technical talks later this year and further political discussions at the Asia Pacific Economic Cooperation (Apec) meeting in Hanoi in November.

Mr Wen said in April the "trailblazing" negotiations had at the crucial stage "encountered some difficulties, for instance in the agricultural and service areas".

He said these were not insurmountable and he and Prime Minister Helen Clark agreed to put more senior negotiators around the table.

China is New Zealand’s fourth largest trade partner and was expected to soon overtake third ranked Japan.

It has the world’s fourth-largest economy with a gross domestic product of $US2.26 trillion ($NZ3.6 trillion) and was predicted to overtake the United States as the world’s largest economy within 20 years.

Bilateral goods trade, running heavily in China’s favour, topped $5 billion in 2005, up almost a third since 2003.

 source: Scoop