NZ - China FTA

Reduction in NZ agricultural export tariffs on the cards

News on Stuff this morning that Helen Clark is preparing to travel to China in April to sign the long awaited NZ - China Free Trade Agreement (FTA) is welcome news.

The Government has been pursuing a trade deal with China since 2004 but has refused to give progress reports because of sensitivity on both sides about the nature and scale of any concessions they might give. It is China's first free trade agreement with any developed nation.

The two main plays in this, I guess, are agriculture (good) and manufacturing (not so good). There might be one effective trade off against the other (pardon the pun). However, as previous posts of mine will point out, outsourcing manufacturing to be closer to your global markets is not always in my view, 'not so good'.

How will a China FTA benefit ICT and emerging technologies such as Pingar? I need to see the detail of the Agreement. But from a relatively agnostic perspective, I suspect that the very existence of the Agreement will provide NZ companies with the commercial 'high ground' when it comes to market entry. That is not to diminish the challenges that any market entry into China brings. Given though the strong influence that Government still has on Chinese business, this Agreement is likely to open doors that might otherwise be difficult to prize open.

On my last trip to the UK, I stopped over in Hong Kong to discuss Pingar's market entry into the HK / China market with David Wishart, NZ Trade Commissioner to Hong Kong. David has since left - no coincidence I hope. I will be visiting NZTE's offices in the region again to further pursue that discussion. I, for one, think that this Agreement can only help NZ businesses bold enough to take the necessary steps to engage with this market.