Exporters to profit from China deal before 2009

By Fran O'Sullivan

New Zealand exporters will pocket the first dividend from today's historic free trade agreement with China when the deal comes into effect on October 1.

Trade Minister Phil Goff and his counterpart, Chinese Commerce Minister Chen Deming, will sign the deal in front of Chinese Premier Wen Jiabao and Prime Minister Helen Clark in the Great Hall of the People at 11.30am (Beijing time).

Mr Goff said yesterday that the first tariff cuts will "be enjoyed" before this year is out and the second set will take effect on January 1 next year.

"This means we're already well down the path towards achieving the objectives of this agreement," he said.

"It will be an important day. It will mark out New Zealand as being a country that is effective in developing trading relationships and removing barriers to trade.

"This could easily - if there is no [World Trade Organisation] round completed this year - be the most important free trade agreement on the international calendar."

Helen Clark said people would be surprised at how far reaching the FTA is. "For a New Zealand export trade of close to $2 billion to have tariffs remaining on only about $80 million of goods is a mind-boggling result."

Negotiations towards the FTA got under way after Chinese President Hu Jintao and Helen Clark signalled their approval at an Apec meeting in Santiago, Chile, in 2004.

Renewed tensions in Tibet - where police fired on hundreds of protesters, allegedly killing eight people - will increase expectations on Helen Clark to raise China's human rights record in her formal hour-long meeting with Mr Wen.

Mr Goff said the Prime Minister would raise Tibet during her discussions with the Premier.

The FTA and a National Interest Analysis will be tabled in Parliament immediately after Mr Goff and his counterpart put pen to paper.

Mr Goff described the agreement as "very good" for New Zealand, contributing to higher economic growth, higher living standards and more jobs.

"It will not serve in any way to undermine NZ working conditions."

Excitement was running high among NZ business people gathered at the Sofitel hotel in Beijing for their first confidential briefing on the FTA.

Ken Stevens, chairman of the West Auckland-based manufacturing firm Glidepath, said the deal would be good for manufacturing exporters as it "breaks down the tariffs."

"My company faces an average of 15 per cent. If that comes down overtime, it will put us in good shape to grow more business share in China."

Mr Stevens - who was Business Champion for the Government's Export Year 2007 - was in the 190-strong delegation that travelled to Beijing to witness the FTA signing.

Business people canvassed by the Herald were adamant New Zealand would have to move quickly to capitalise on its "first-mover" advantage.

Australian Prime Minister Kevin Rudd arrives in Beijing midweek to advance his country's own FTA negotiations. "The Aussies are hard on our heels," said Mr Stevens. "I wouldn't think they'd be too long behind us. It's a good reason to keep us moving fast."

Federation of Maori Authorities chief executive Paul Morgan said the FTA would "be good for Maoridom", which has a big position in New Zealand's primary agri-business activity.

The reduction in tariffs will be extremely beneficial, particularly for the seafood sector. Getting deeper in the market would help New Zealand to gain an advantage over other bigger, global competitors.

After the deal is signed, Mr Wen will host a small banquet. There will be a celebratory dinner for 600 tonight.

New Zealand exporters can see how the FTA affects them on a new website - www.chinafta.govt.nz - later today. The site will detail when tariff reductions kick in for all sectors.

- NZ Herald

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