Take better advantage of China trade deal, Kiwi exporters told

By Ben Chapman-Smith

Kiwi exports to China have more than doubled to $5.89 billion since the FTA was introduced in October 2008. Photo / File
Kiwi exports to China have more than doubled to $5.89 billion since the FTA was introduced in October 2008. Photo / File

New Zealand exporters to China have again been told that they aren't taking full advantage of lower tariffs pushed down by free trade deals.

Since the Free Trade Agreement (FTA) was introduced in October 2008, Kiwi exports to China have more than doubled to $5.89 billion in 2011.

China now accounts for over 12 per cent of Kiwi exports, making it our second biggest trading partner after Australia.

This is largely because tariffs on our exports into China have been phased down, making it cheaper to trade. Products like wine, honey, and fish and seafood exports became tariff-free from January 1 this year.

Speaking at a China FTA workshop held in Auckland this week, MFAT head of research Vicki Plater told delegates there has been a significant increase in the number of Kiwi businesses exporting to China since the FTA's introduction.

But many industries are not making use of the tariff preferences available and so money "is being left on the table", she said.

"It seems to be a relatively low number of trade lines utilising available preferences.

"There's significant scope for businesses to reap more benefits from the FTA."

While sectors like dairy and fruit and vegetables were making use of the agreement, others not doing so include fish and fish products, textiles and clothing, and minerals and metals, she said.

New Zealand Trade and Enterprise (NZTE) recently said an estimated $90 million was going begging as Kiwi exporters failed to claim tariff preferences.

Possible reasons for lower than expected uptake so far might be that the trade preferences had not been attractive enough for businesses, Plater told delegates.

To benefit from reduced tariffs, products must qualify as 'originating' from either China or New Zealand, and specific documentation was needed to prove that.

"Some businesses might think 'we can't be bothered with the effort'," Plater said.

She expects that to change as the tariff rates came down.

Another reason for low uptake could simply be a lack of awareness of the FTA, either from the New Zealand exporter or their import agent in China, she said.

Trade Commissioner and Consul-General Patrick English, another speaker at today's workshop, told exporters their agents on the ground in China need to be very familiar with the FTA.

"We're still coming across agents who don't understand the FTA. That's up to you to educate them about the agreement," he said.

"The Chinese are very pedantic about the documentation. They're not a charitable institution."

He said the regular turnover of staff in Chinese customs means the onus is on agents to know the rules, as incoming officials might be unfamiliar with the specific trade preferences.

Delegates were told that a number of approaches are being taken to address the issues, outside of such workshops.

One includes New Zealand Customs and Chinese Customs holding ongoing discussions about how to streamline the process of trade between countries.

Plater said MFAT and NZTE were working on concerted plans to go out and speak to industries and find out what issues they faced to claiming tariff preferences.

This morning's workshop was jointly run by NZTE, the Ministry of Foreign Affairs and Trade, New Zealand Customs Service and New Zealand China Trade Association.

When the NZ-China FTA was signed in April 2008 in Beijing, it concluded a three-year negotiation process.

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