China-New Zealand FTA Upgrade Brings More Benefits to Bilateral Trade – World Business Management Foreign Trade Training

Summary

The protocol upgrading the China-New Zealand Free Trade Agreement (FTA) came into effect on 7 February. Michael Fox, Zespri's Director of Global Public Affairs, said a cargo ship carrying more than 5,000 tonnes of kiwifruit arrived at Damaiyu Port in Taizhou, Zhejiang on 10 February, and the company plans to send 20 ships of kiwifruit to China this year, benefiting from the FTA's fast-track customs clearance clause to ensure whole-chain cold chain quality. Justine Arroll, Fonterra's Global Director of Trade Strategy, said all New Zealand dairy products will enjoy preferential tariffs to enter the Chinese market from January 2024.

Andrew Harvey, General Manager of Fiordland Lobster Company, has already adjusted and allocated lobster resources in advance for China's National Day Golden Week. Huang Yuefeng, Economic and Commercial Counsellor at the Chinese Embassy in New Zealand, pointed out that the upgraded agreement reflects the trade resilience of the two countries, and New Zealand companies regard China as a strategic market. Bao Yizhi, former New Zealand Ambassador to China, said the agreement brings greater customs clearance convenience and saves time for exporters.

This year marks the 50th anniversary of diplomatic relations between China and New Zealand, and the FTA upgrade further consolidates bilateral trade foundations.

Commentary

For SME owners in New Zealand, the FTA upgrade directly reduces tariff costs for exports to China, especially for dairy and fresh products. Taking Fonterra as an example, all dairy products will have zero tariffs after January 2024, which paves the way for small and medium-sized dairy enterprises to enter the Chinese market, but competition will also intensify, requiring a focus on brand differentiation. Zespri's quick customs clearance case shows that fresh export enterprises should optimise cold chain logistics to take advantage of customs facilitation to capture the market.

High-end seafood such as lobster benefits from holiday consumption; SMEs can target promotional periods like China's Golden Week and arrange supply chains in advance. However, the agreement also means that Chinese consumers have higher quality requirements, so exporters must strictly comply with inspection and quarantine standards. It is recommended that SMEs pay attention to the specific rules of origin clauses in the agreement to ensure compliance for benefits; meanwhile, they can join industry associations to strive for customs green channels.

In the long run, the upgrading of the Chinese market will drive New Zealand products from commodities to high value-added; SMEs can explore cooperation with e-commerce platforms to directly reach consumers.

Keywords: China-New Zealand FTA upgrade, tariff reduction, customs facilitation, Zespri, Fonterra, dairy products, kiwifruit, lobster, 50th anniversary of China-New Zealand diplomatic relations

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