Trade and Export Growth Minister David Parker returned to NZ on Saturday after what his PR flaks described as a “successful” official visit to China.
So Point of Order went looking for the success. And yes, he has had talks with his ministerial counterparts in the trade and environment portfolios.
This, according to the press release issued in his name, constituted “ yet another step in this government’s work to deliver a modern, sustainable economy for New Zealanders”.
Wow. And no doubt our wellbeing will be lifted, too.
But what about the upgrade to the free trade agreement between NZ and China? This was first mooted four years ago, after Australia secured in 2015 a FTA on better terms than NZ’s 2008 ground-breaking model.
Given that two-way trade between China and NZ is running at $30bn a year, anything that could improve the trade flows would be welcome by both exporters and importers, not to mention consumers.
NZ is now one of China’s top five sources of imported food.
It was in 2016 that NZ and China agreed on the scope of the upgrade and formal negotiations were launched at the APEC Leaders Meetings in Lima, Peru.
And then followed:
April 2017: Round one of upgrade negotiations in Beijing, China
July 2017: Round two of upgrade negotiations in Beijing, China
November 2017: Round three of upgrade negotiations in Queenstown, NZ.
June 2018: Round four held in Beijing, China
Sept 2018: Round five held in Beijing, China
Nov 2018: Round six held in Beijing, China
It should be unsurprising, then, that Parker – in his talks in Beijing – should put some focus in his official meetings with Chinese Minister of Commerce Zhong Shan, on the successful completion of the marathon FTA upgrade negotiations.
Indeed he pressed for it to be done “as soon as possible”.
He got from Commerce Minister Zhong Shan an agreement “to take the next step with the FTA upgrade”.
This, he said, followed on from the agreement between Premier Li Keqiang and Prime Minister Jacinda Ardern during her visit to China earlier in April.
Exporters will be looking to the next “step” as the final one. A round of talks is due to be held in Wellington during May.
Once negotiations have concluded, the text of the agreement will be considered by Cabinet. Cabinet will also consider whether to approve the text as well as the necessary steps to bring the new agreement into force.
The existing 2008 Agreement will continue to remain in force, and the upgraded free trade agreement will sit alongside these original commitments.
The upgraded free trade agreement will add new provisions to the existing agreement, and in areas where the existing agreement’s provisions have been amended, these will be replaced by the upgraded free trade agreement.
NZ Herald’s Fran O’Sullivan who has specialised in commentary on China-NZ relations, reckons it has been Parker’s “most substantive visit to China as a minister in the Ardern government. He plans to scope new areas of co-operation on science and innovation”.
O’Sullivan went on to record Parker as saying a successful upgrade of the FTA will also be a demonstration of both countries’ commitment to trade and a rules-based system and “our rejection of protectionism”.
Meanwhile Point of Order understands the dairy industry may have to keep in check its hopes of getting terms as favourable as those enjoyed by Australia ( or even better). Tariffs of over $100m a year look set to continue until 2024.
The tariffs are applied once NZ exports reach a certain “safeguard” level, with the trigger point for milk powder, the biggest export, at the beginning of the season. Although the safeguards end in 2024, NZ exporters will be at a disadvantage compared with Australian competitors until then.
Apparently the NZ bargaining position has been to seek gains in e-commerce, and services (particularly digital) in exchange for not pressing hard the dairy “safeguard” issue.
Maybe that will be a “step” on the way to a “modern, sustainable economy” for NZers. In the meantime it’s not too much of a stretch to assess the protracted negotiations on the FTA upgrade as a commentary on how authorities in Beijing view the relationship with NZ.