China free trade on fast track

Helen Clark and Premier Wen Jiabao attend a press conference in the Legislative Council Chamber Parliament yesterday. Marty Melville / Getty Images

Chinese Premier Wen Jiabao has moved a free-trade agreement on to the fast track, saying he wants the potentially lucrative deal for NZ exporters signed within two years.

Before Mr Wen arrived, Prime Minister Helen Clark had downplayed the apparent lack of progress in talks which began 18 months ago and would make this country the first developed nation to sign a free-trade deal with China.

Yesterday, at a joint press conference with her guest, a buoyant Helen Clark was able to announce a dramatic acceleration. "Premier Wen came with a very positive message for New Zealand today," she said.

"We have confirmed in our discussion that we are both looking for a comprehensive, high-quality agreement acceptable to both sides.

"We have agreed to elevate the level of negotiations to vice-minister level, which equates with deputy secretary level here, and we can see our way to moving towards conclusion within one to two years."

To reinforce the high-level push, Helen Clark said she and Mr Wen had agreed to annual bilateral meetings between New Zealand and Chinese leaders, either during a visit to one country's capital or a "substantial" bilateral at an international summit.

"We see China with its very rapid development on a grand scale meaning that it will have a big part to play in our future and our development."

Trade between New Zealand and China is worth more than $5.5 billion a year, and China is New Zealand's fourth-biggest trading partner.

A free-trade deal is expected to see exports of goods and services to China grow, on average, by between $55 million and $400 million a year.

While the expected increase in Chinese exports to New Zealand - by $55 million to $100 million - might seem small beer to a country with a GDP of $1.83 trillion, Mr Wen said he was keen to take China's trade relationship with New Zealand to this new level.

He called the negotiations "trailblazing" and predicted that potential stumbling blocks to a deal - notably issues surrounding agriculture and intellectual property rights - could be overcome.

"Bilateral FTA negotiations have entered into a crucial stage and have encountered some difficulties, for instance in the agricultural and service areas," he said.

"However, these are not unsurmountable ... As long as the two sides act in the spirit of equality, mutual trust, mutual accommodation and mutual understanding, we will be able to overcome those difficulties."

Opposition leader Don Brash, who had a private meeting with Mr Wen, welcomed the sudden acceleration towards the free-trade agreement.