Alibaba floats airport free-trade zone
Trade minister listening to e-commerce giant’s plan to amass NZ products and ship to China at low cost
Chinese e-commerce giant Alibaba has floated a proposal for a free trade zone to be created in Auckland near to the airport. Alibaba president Michael Evans promoted the idea to senior Cabinet ministers during a recent visit to New Zealand. Trade Minister Todd McClay says the proposal “merits further consideration”.
McClay indicates that if it results in goods flowing more easily across borders it is worth pursuing.
But, he says, given the regulatory issues it would need to have input from a range of government departments.
Free trade zones typically facilitate cross-border trade by removing obstacles imposed by customs regulations and can ensure faster turnaround of planes and ships by lowering custom-related formalities.
For New Zealand, which is a major food exporter, the proposal could also be tailored to ensure exports are precertified as meeting the relevant quality standards.
Alibaba’s strategy is to aggregate thousands of small NZ businesses onto a platform where their products are pooled and shipped at a cost low enough to make it good for both consumers and sellers.
Alibaba is understood to want to develop the proposal further with Auckland Airport and NZ Post.
Evans notes that Alibaba has to show there are creative ways to do things that can make governments and trade ministers comfortable that this can work and can be beneficial on a reciprocal basis.
“Because China has made a big effort in setting up these free trade zones but doesn’t yet see that other countries [are] moving in the same direction.”
From Alibaba’s perspective this would enable it to more easily promote the sale of NZ exports through its e-commerce platforms to customers in China.
In 2013, the General Administration of China Customs and the NZ Customs Service established new clearance procedures for New Zealand goods held in special customs controlled areas and bonded warehouses in China and declared for part release into the domestic market.
The procedures were expected to assist importers in China receiving the full benefits of the China-New Zealand Free Trade Agreement.