Todd McClay: Li visit another significant milestone

New Zealand Minister of Trade, Todd McClay addressing ministers as they begin the formalities of the signing of the TPP. Photo / Nick Reed

Opinion

In a first for any developed country, New Zealand entered into a free trade agreement (FTA) with China in 2008. With this came a unique competitive advantage for our exporters, and trade between our two countries sky-rocketed. Two-way in goods and services trade is now worth $23 billion - three times what it was before the FTA was signed.

At a time when the value of free trade has never been more important, these figures serve as a timely reminder of the benefits of high quality trade agreements.

As we approach the end of the FTA's first decade in force, it is a good time to take another look at the opportunities for further deepening our trading links with China. It's also time to consider the extent to which the provisions of the FTA remain modern and relevant, and how it can be further improved.

Under the freshly announced Trade Agenda 2030, one of the the Government trade strategy focuses is maximising the benefits of our existing FTAs. The chance to upgrade one of our most important bilateral agreements is an excellent way to start delivering on that commitment, and should prove to be another significant milestone in our relationship with China.

The visit to New Zealand by Chinese Premier Li Keqiang is also highly significant - not just because it has been over 11 years since a sitting Chinese Premier last visited our shores - but because the visit will add impetus to the launch of the FTA upgrade negotiations, as well as bringing other important areas of the bilateral relationship into focus.

Since our FTA entered into force, China has concluded a number of newer FTAs with other countries, including most recently with Australia, Korea, and Switzerland. It is essential that New Zealand's FTA with China remains a modern, cutting-edge agreement - the FTA upgrade provides us with the opportunity to ensure this will be the case.

President Xi Jinping commented at Davos in January that all countries should "commit ourselves to growing an open global economy to share opportunities and interests through opening-up and achieving win-win outcomes". New Zealand shares this view. China's One Belt One Road Initiative, with its commitment to improving regional connectivity and infrastructure, is an excellent example of China following through on this vision.

The Regional Comprehensive Economic Partnership Agreement (RCEP) negotiation and the NZ-China FTA upgrade provide key opportunities for New Zealand and China to continue to show leadership on trade in the Asian Pacific region. RCEP and the upgraded FTA are important parts of the evolving regional economic architecture, and will provide a platform for the next decade, and beyond, for deepening trade and economic linkages between our two countries. With the date for the first upgrade negotiation having recently been announced we now celebrate another "first" in our trading relationship with China.