Prime Minister John Key says China's Ambassador to New Zealand has given an "absolute assurance" there would not be trade reprisals from any investigation into claims of steel-dumping by China.
Speaking in Indonesia, Key said trade officials met with Chinese Ambassador Wang Lutong in Wellington yesterday after media reports that China had threatened to impose non-tariff trade barriers on New Zealand exports if an investigation into steel dumping went ahead.
"What we are aware of is a meeting between the Chinese Ambassador to New Zealand and New Zealand officials where there has been an absolute assurance given that there won't be any reprisals of actions taken against New Zealand in the hypothetical case that there was a further investigation, or an investigation into steel issues in New Zealand."
Trade Minister Todd McClay told trade officials to talk to the Chinese Embassy following a Fairfax Media report that China was threatening to clamp down on dairy and kiwifruit exports from New Zealand if a formal investigation into alleged steel dumping by China was launched by the Ministry of Business, Innovation and Employment(Mbie).
The Government has refused to confirm whether NZ Steel and its subsidiary Pacific Steel had lodged complaints China was 'dumping' low cost steel in the New Zealand market. Complaints are confidential unless Mbie decides to investigate although the Free Trade Agreement with China requires China to be informed of any complaint.
Key said trade disputes between countries were not unusual - New Zealand had complained to the World Trade Organisation about Indonesia blocking beef exports and successfully pursued Australia's ban on New Zealand apples. "It doesn't mean retaliatory action will take place and I personally don't think it will."
Key said he was not aware of any meetings between Chinese trade officials and New Zealand industry groups such as Zespri in China where threats of reprisals were made.
Fonterra has said it had no knowledge of any suggestion of reprisals from China and Zespri has refused to comment.
The Chinese Embassy has not responded to repeated requests for comment.
Last week, China and the European Union agreed to form a working group for ongoing discussions about China's steel industry after claims by EU steelmakers that China was dumping steel in the world market.