Updated trade agreement with China expected to offer only small gains

AUCKLAND: A longawaited ‘‘upgrade’’ to New Zealand’s freetrade agreement (FTA) with China could be imminent, negotiations having reached a point where both governments are willing to sign.

Since 2016, officials have been in talks to renegotiate parts of the agreement signed between New Zealand and China in 2008, Beijing’s first with a developed country.

Exporters from New Zealand hoped officials could win new concessions, China having agreed larger quotas and tariff elimination in other more recent FTAs, in particular Australia’s agreement on dairy products in its 2014 agreement.

For much of 2018, the odds of a deal looked remote, as trade sources warned that Beijing was unlikely to give ground on dairy products, and signs of strained relations between the two governments. New Zealand also appeared to have less that it could offer China than it wanted in return.

Now it appears that talks have progressed to a point where both governments are prepared to sign, although there is no clarity on when a deal might be announced.

‘‘We hope to be able to make an announcement soon,’’ Trade Minister David Parker said yesterday, without giving details.

The gains from the upgrade are believed to be small in comparison to the original 2008 deal, including no improvement for the dairy sector.

However, the upgrade is expected to benefit exporters of wood and paper products, while the elimination of some export certification would reduce compliance costs, a particular gain for companies which do a relatively small amount of trade with China.

It appears China may also be willing to do away with certificates of origin for imports from New Zealand.

Exporters to China wanting to achieve the tariff concessions available under the 2008 deal are required to fill out a certificate of origin, which then has to be certified by an authorised body, such as a chamber of commerce. — The New Zealand Herald