Business keen to get moving on trade deal

By LIAM DANN

Initial feedback from the business community indicates strong support for a free-trade deal with China, says the man leading the Government taskforce on the issue.

Charles Finny said the taskforce - composed of officials from key Government departments as well as New Zealand Trade and Enterprise - had so far talked directly with more than 200 local companies.

It had also received feedback from a group of companies which together accounted for 80 per cent of New Zealand's exports to China. It had also had contact with companies accounting for 50 per cent of imports.

Finny told delegates at the Gateway to China conference in Auckland yesterday that the biggest concern identified was the level of tariff protection in China.

"But the clear message was that a free-trade agreement needed to be about more than just tariffs," he said.

New Zealand exporters faced a wide range of problems.

These included standards and labelling requirements, hygiene and quarantine rules, unnecessary testing regimes and inconsistencies in the application of value-added taxes.

Finny said the taskforce had picked up some concerns from industry about increased competition from China.

Some companies said the existing phaseout period outlined by the Government for remaining tariffs - which had a 2009 deadline - should be maintained in any agreement with China.

One of the strongest reasons to push the free-trade agreement was that if New Zealand didn't others certainly would.

China was already negotiating with the Asean group and was about to begin negotiations with South Africa. It was studying the possibility of agreements with Australia and Chile and there was now talk about an agreement with the EU.

If those countries all enjoyed free- trade agreements with China and New Zealand did not there would be problems.

The idea of doing a free-trade deal with China was first mooted by New Zealand Government officials as far back as 1994.

At the time, Chinese officials agreed it was a great idea but that it would have to wait until China had joined the World Trade Organisation.

Also in the mid-90s, the Government made changes to anti-dumping laws, which made it easier to recognise China's status as a market economy.

The fact that New Zealand was the first country to recognise China on that point was considered an important reason it had been put at the top of the list for a free-trade deal.

China also saw New Zealand as a good test case before entering negotiations with larger developed economies.

Another conference speaker - former World Trade Organisation head and ex-prime minister Mike Moore - said New Zealand had been presented with a golden opportunity in the China deal, which it needed to seize.

Moore delivered his trademark rallying cry for globalisation by saying China was not going to change the world - it already had.

China's economic success was having a global ripple effect.

India's strong growth was starting to mirror China's success and the Russians were now increasingly keen to reform their economy and join the party.

It would be irresponsible for New Zealand not to grab the opportunity that the China deal presented. Free trade was vital to the continued living standards, prosperity and tranquillity of New Zealand.

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Gateway to China conference website