NZ enters ‘upgrade’ trade talks
Negotiators will square off with Chinese counterparts in Beijing today, marking the official start to the ‘‘upgrade’’ of the historic New Zealand-china historic free trade agreement.
A group of officials led by Brad Burgess, the deputy negotiator in the Trans-pacific Partnership Agreement (TPPA) process, has travelled to the Chinese capital to hold initial meetings and lay out a timetable for future talks, which are expected to last a year.
Political will for a new deal appears to be strong, since the negotiations were first announced in November.
During Chinese Premier Li Keqiang’s visit to New Zealand in March, he and Prime Minister Bill English laid out the timing of the renegotiation, which they said was essential to raise two-way trade between the two countries from the current $23 billion to $30b by 2020, a goal set in 2014.
But observers warn New Zealand takes a problem into the talks: the number of areas where it is seeking to make gains.
Stephen Jacobi, executive director of the New Zealand China Council, said that while the main sticking point for New Zealand would be bringing forward tarifffree dairy trade, industries from avocados to forestry were wanting help to ease the path for exports.
‘‘The problem we have in the negotiations, I think, is our list is possibly quite a bit longer than the Chinese list,’’ Jacobi said.
Mcclay said this week’s talks would resemble a scoping exercise.
‘‘Officials will begin talking about the priorities of each side, and sort of scheduling when they will deal with them and over what period of time.’’
Although a wide range of areas will be discussed, Mcclay said the issue of New Zealand’s dairy safeguards will be raised.
Agreed in the 2008 FTA, New Zealand’s dairy industry faces tariffs once a volume threshold is met. Such has been the growth of trade that the annual threshold is typically met in January.
‘‘Trade in a number of areas has grown more quickly than anyone predicted,’’ Mcclay said.
The 2008 agreement included an end date for dairy safeguards, which is expected to kick in in about four years.
Mcclay said that while this end date was ‘‘locked in’’, New Zealand has already indicated to the Chinese that it wanted the subject to be part of the renegotiations.
What China wanted was less clear, Jacobi said, with New Zealand already agreeing to be part of the belt and road initiative.
One thing China might push for is an increase in the investment threshold at which Overseas Investment Office (OIO) clearance is needed. China’s ‘‘most favoured nation’’ status, agreed in the 2008 FTA, meant it was set to get an uplift in the threshold when New Zealand implemented the TPPA.
Jacobi said Beijing may push for the issue to form part of the renegotiation, now that it was ‘‘dubious’’ that the TPPA would be implemented.
Chinese food exporters might also raise issues around New Zealand’s import regulations.