Prospect of NZ-China FTA Good News
A free trade deal between China and New Zealand has the potential to bring many benefits to both countries, but in
particular to New Zealand agriculture, said Tom Lambie, President of Federated Farmers of New Zealand (Inc).
"We each stand to gain from the substantial boost such a partnership would give to bilateral trade," said Mr Lambie. His
comments follow the announcement that New Zealand and China would begin negotiating a free trade agreement (FTA) next
year -- the first time China has agreed to negotiate an FTA with a developed country.
New Zealand exports to China have traditionally been dominated by wool, but have diversified in recent years to include
dairy products, especially milk powders, casein, butter, and whey, and agricultural products such as live goats and
cattle.
Total exports to China have fallen four percent to NZ$1.43 billion in the year to February from the previous
corresponding year, but are still more than double the $649 million of exports in 1999. China last year displaced
Britain as New Zealand's fourth-largest export destination.
"A free trade deal could give New Zealand exporters, particularly those of agricultural products, a potentially huge
market," said Mr Lambie. “There is a long way to go before a free trade deal is concluded, but any progress toward wider
access for exports to a market of 1.3 billion people has to be good," he said.
China's share of world income has risen from four per cent in 1988 to 13 percent today. By 2015, China is expected to
account for 20 percent of world income, according to the Australian Bureau of Agricultural and Resource Economics
(ABARE).
Mr Lambie praised both Prime Minister Helen Clark and Trade Negotiations Minister Jim Sutton and other negotiators for
their work so far. "It's fantastic that New Zealand is first off the rank. This will help soothe worries that we are
being left behind on negotiating access to the world's larger economies after the recent completion of a limited
Australia-United States FTA."
"While we would prefer trade access to be negotiated through the rules-based World Trade Organisation, a bilateral free
trade deal is a welcome consolation prize."