Platform set for talking free trade

Jim Sutton

BEIJING - Trade Negotiations Minister Jim Sutton is confident a "very strong" platform has now been built for free-trade negotiations with China after three weeks of top-level contacts between Chinese and New Zealand leaders.

There are still significant differences, particularly over New Zealand's push for a zero tariff outcome to be phased in so that Chinese agricultural producers have time to adapt, and China's request for New Zealand to adopt a more "flexible" approach.

But Sutton, who met with Chinese Vice-Premier Wu Yi in Beijing on Friday, said both sides had agreed to work hard to ensure convergence on all issues and achieve high benefits.

Wu told New Zealand officials that China would take active measures to boost the free-trade agreement negotiations.

"I hope New Zealand will become the first developed country to establish a free-trade area with China."

Wu, who negotiated China's entry into the World Trade Organisation, said China would push forward the free-trade agreement issue with the principles of equality and mutual benefit in mind.

But Sutton reaffirmed New Zealand's goal was to achieve a high-quality agreement rather than a fast one.

"We rehearsed the refinements that had been agreed in the Joint Ministerial Commission earlier in the week and explored the extent to which flexibility means flexible," said Sutton.

"There is no doubt about it, this is a very high-priority exercise for China as well. It goes without saying that this is a relationship of the highest importance to New Zealand and we're putting everything we can into it to get a high-quality outcome.

"That commitment is clearly shared by China's top leadership."

Sutton - who earlier headed a trade mission to Inner Mongolia including representatives from more than 20 leading dairy and farming technology companies - said there was no doubt that sensitivity around the dairy industry was there.

He said the situation of rural China, where some 300 million people earn less than US$2 a day, was of critical interest to the Chinese.

"But at the same time we have seen the models of co-operative activity in Inner Mongolia which we can clearly work with to achieve mutual benefits.

"I think if we proceed with care we can get the right structure to work for both of us and I'm confident that is now understood at the highest levels of the Chinese Government."

New Zealand negotiators - led by China taskforce head David Walker - will return to Beijing next month for the fourth round of negotiations.

Although no deadline has been set, there is speculation in Beijing that China's leadership would prefer to announce a deal at November's Apec leaders' meeting in South Korea.

But the New Zealand side says it does not want to sacrifice quality to get a quick political deal.

Free trade

New Zealand is well placed to become the first Western nation to sign a free-trade deal with China.

A joint feasibility study suggests New Zealand would make export gains of $260 million to $400 million each year between 2007 and 2027.

The Chinese gain is estimated at $55 million to $100 million.

The fourth round of negotiations begin in Beijing next month.