Free Trade Agreements & Dialogues

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It has been a long time coming (we covered developments here in November 2006), but New Zealand recently become the first developed nation to sign a free trade agreement with China. CEP News reported:

“The pact will allow a limited number of Chinese workers to enter New Zealand in order to fill sectors experiencing labour shortages. The deal limits the number of workers to 1,800 at one time and to no more than 100 per sector.

In exchange, Kiwi products that currently face tariffs of up to 5% will see a phased reduction of those taxes within 12 years. Tariffs removal is thought to be of significant advantage to New Zealand’s primary exports of dairy products and lamb.

China will in turn gain from the imports to meet its rising demand for such products which domestic farmers are struggling to meet. The deal takes effect Oct. 1, 2008 and has been in the works for more than three years. It came about following 15 rounds of negotiations between the two nations.

…Trade between China and New Zealand is currently valued at more than US$6.1 billion annually, with exports from China making up about 75% of that total, according to data from Statistics New Zealand. ”

Despite threats of protectionism from some quarters, China has re-iterated its desire for open trade. Xinhua, reporting on a meeting with the UK Chancellor, noted:

    “[Premier Wen] said China supports a fair and open multi-lateral trade system. He added China is willing to make joint efforts with all countries to promote the Doha round talks.”

While there is no free trade agreement, the UK has been making progress in the bilateral relationship (report from Xinhua):

    “China and the United Kingdom (UK) convened their first-ever economic and financial dialogue here Tuesday, in which they reached consensus on facilitating bilateral investment and cementing joint efforts to solve international problems including climate change.

    …The countries are in favor of market openness, trade and investment liberalization, and against protectionism, the Foreign Ministry said in a statement. They agreed to expand investment and civil high technologies trade, promote an all-round and balanced development of goods and service trade, and push forward progress of the Doha Round negotiations.

    The British side promised to continue their push for EU’s early recognition of China’s market economy status, and welcomes Chinese sovereign wealth fund to invest in the UK.

    China welcomed British financial organizations to expand their business in central and western China and rural areas, while the UK expressed its willingness to offer convenience for Chinese banks to explore business in the country, the statement says.”

It will be interesting to see how that compares to the US-China Strategic Economic Dialogue

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