KEY POINTS:
At first sight the free trade deal with China lives up to its billing as a comprehensive and high-quality agreement.
It ought to allow New Zealand to benefit, more fully than it can now, from China's spectacular growth.
The phase-out period for tariffs on New Zealand's principal agricultural exports is longer than farmers might have wished.
It will take nine years for tariffs on meat to be eliminated. For milkpowder the phase-out is 12 years and will be followed by a five-year period of tariff rate quotas after that. But those barriers will eventually go.
Contrast that with the entrenched array of tariffs, quotas and subsidies protecting most developed countries' agricultural sectors and the glacial pace of progress in reducing them.
China's economic expansion is more valuable to New Zealand's economy than is growth within the rest of the OECD.
It is propelling large numbers of people into the middle-income brackets where they can afford to consume more of the foods of affluence, including the meat and dairy products of which New Zealand is an efficient producer.
It is one of the reasons why New Zealand's terms of trade - relative prices for the kinds of things it exports compared with the kinds of things it imports - are more favourable now than at any time since 1974.
China is New Zealand's fourth-largest export market and is second only to Australia as a source of imports.
The trade balance is in China's favour by nearly three to one, with exports of $2 billion and imports of $5.7 billion in the year ended February.
Some of the reasons for the trade imbalance cannot be addressed by a bilateral deal.
China has the advantages of low labour costs and the economies of scale a huge domestic market provides.
That means any manufacturer whose business is to produce something China can mass-produce is already on a hiding to nothing. Maintaining residual tariff protection would only put off the evil day, at the consumer's expense.
Lingering concerns about China's respect for intellectual property will probably be addressed only in the context of multilateral negotiations involving countries with much more weight to throw around than New Zealand has.
And the advantage China gains from a managed and undervalued exchange rate remains, though it comes at a price in terms of inflationary pressure which may render it in the end unsustainable.
For New Zealand companies investing in China the FTA offers two valuable protections: national treatment and most favoured nation status.
The first means New Zealand-owned enterprises, at least once approved and established, are entitled to the same treatment China gives its own firms.
The second means any more liberal rules it agrees in the future with other countries will apply to New Zealand firms investing into China as well.
The business lobby groups have welcomed the deal.
"The agreement has the potential to be the CER of the 21st century," said Business New Zealand chief executive Phil O'Reilly.
Wellington Regional Chamber of Commerce chief executive Charles Finny, who as a Ministry of Foreign Affairs and Trade official began the FTA negotiations, said that on investment the agreement probably went further than CER.
Finny welcomed the provisions on entry of skilled Chinese workers, subject to certain caps.
"Our members say the biggest problem they face is hiring labour, and skilled labour in particular. We would have been happier if the provisions had been more extensive," he said.
Business Roundtable chairman Rob McLeod said the task of adjusting to additional competition was quite manageable, provided economic flexibility was maintained.
