The upgraded free trade agreement (FTA) between New Zealand and China entered into force on Thursday, said New Zealand’s trade and export growth minister.
“Our trade agenda has strong momentum, with the China Upgrade coming weeks after the signing of our UK FTA, which will add up to $1 billion to our GDP,” Damien O’Connor said in a statement.
The two countries had agreed in February to implement the new upgraded deal from April 7.
Under the upgraded FTA, New Zealand will get tariffs on 12 wood and paper products eliminated for the next 10 years, ultimately giving 99% of New Zealand's $3 billion trade in this sector tariff-free access to China.
Since the two countries signed their initial FTA in 2008, Beijing had eliminated or reduced tariffs on 75 wood and paper products.
“China continues to be an important market for New Zealand, with goods and services exports reaching $21.5 billion in 2021," said O’Connor.
Since the beginning of this year, China also lifted duties on most of New Zealand's dairy products.
New Zealand set its exports target at $50.8 billion for this financial year, which is ending in June.
“The government is also negotiating the conclusion of a free trade agreement with the European Union as soon as possible. The Regional Comprehensive Economic Partnership – the world’s largest FTA – has also entered into force along with PACER Plus in the South Pacific,” said O’Connor.
The Pacific Agreement on Closer Economic Relations, or PACER Plus, is a landmark agreement connecting the Pacific region through trade and development.