Wellington: China and New Zealand signed an agreement that raises the level of their existing free trade agreement, giving exports from the Pacific nation greater access to the world’s second largest economy.
New Zealand Prime Minister Jacinda Ardern confirmed the signing of an expanded trade agreement with China, noting its importance amid the epidemic.
The agreement comes as Beijing seeks to cement its position as a strong defender of multilateralism in the wake of a painful trade war with the United States, and as the spread of the Corona virus continues to keep international borders closed.
“China remains one of our most important trading partners … for this to happen during the global economic crisis that was bought by Covid-19, it makes it especially important,” Ardern said at a press conference.
New Zealand Trade Minister Damian O’Connor said in a statement that the agreement broadens the scope of an existing trade pact with China and ensures that it remains fit for purpose for another decade.
Under the new agreement, tariffs will be removed or reduced on many New Zealand exports that depend on mostly commodities, which include dairy products, timber and seafood. Compliance costs will also be reduced.
China’s multilateral push
After years of pressure from the Trump administration over trade and, more recently, international scrutiny over the handling of the Coronavirus, China has emerged as a surprising champion of globalization and multilateralism.
In recent months, Beijing signed an investment agreement with the European Union and joined the world’s largest free trade bloc in the 15-nation Regional Comprehensive Economic Partnership (RCEP), which also includes New Zealand.
China has also expressed interest in joining the Comprehensive and Progressive Partnership across the Pacific Agreement (CPTPP), which succeeded an earlier agreement that Washington withdrew from.
Speaking at a hypothetical meeting of the World Economic Forum on Monday, President Xi Jinping criticized isolationism and “Cold War” thinking and called for the removal of barriers to trade, investment and technology exchange.
Under its new deal with Wellington, China will also open up sectors such as aviation, education and finance.
In return, New Zealand will increase visa quotas for Chinese language teachers and tour guides, Xinhua News Agency reported on Tuesday.
New Zealand was the first developed country to sign a free trade agreement with China in 2008, and Beijing has long described it as a model for Western engagement.
China is now New Zealand’s largest trading partner, with annual two-way trade of over NZ $ 32 billion.
But relations tested under the Ardern government as New Zealand criticized China’s influence on the small Pacific islands and raised human rights concerns about Uighur Muslims.
Ardern also supported Taiwan’s participation in the WHO despite Beijing’s warning.
The trade agreement with New Zealand also comes as relations between Beijing and neighboring Australia worsened after Canberra called for an independent investigation into the origins of the coronavirus pandemic, which was first reported in central China.
Australia has called on the World Trade Organization to review China’s decision to impose massive tariffs on Australian barley imports.
New Zealand, which will host the Asia-Pacific Economic Cooperation summit this year, has said it is ready to help negotiate a truce between China and Australia.