KEY POINTS:
The trade deal between China and New Zealand will eventually result in the elimination of tariffs on 96 per cent of New Zealand's exports to China, but has immediate effects as well.
When the deal comes into force from October 1, those tariffs at or below 5 per cent on exports will be cut to zero.
This will cover more than $200 million worth of goods and means 35 per cent of trade with China will be tariff-free from day one.
From there a staged programme of cuts will kick in and within five years China's tariffs on goods in the six to 20 per cent range will be eliminated.
This will mean another 31 per cent of total exports to China will be tariff-free by 2013.
Dairy products will be phased out over a longer time frame, but by 2019 all but $80 million worth of current trade with China will be tariff-free.
The deal also bestows "Favoured Nation Status" on New Zealand, giving exporters easier access to markets and less stringent non-tariff barriers.
It also means that if another nation gets better terms in a future trade deal with China, it will also apply to New Zealand.
Prime Minister Helen Clark said the deal was important not only for New Zealand, but the rest of the developed world.
"This is a big deal. There has not been a trade deal like this with China done by anyone before.
"It will create significant international interest particularly at this time of global market volatility when there needs to be confidence injected into the global economy," Helen Clark said. "It is a good sign for everyone."
Studies predict New Zealand trade returns with China could increase by up to $350 million in addition to the tariff savings of more than $100 million.
Helen Clark said it could be worth more provided business seized the opportunities on offer.
For other than specified "sensitive" goods - kiwifruit, some meat, sheepskins and dairy products - the following programme will apply:
DAIRY
Some dairy products - infant milk formula, casein, yoghurt and whey - will be phased out over five years;
China's tariffs on butter, liquid milk and cheese will be phased out over the 10 years to 2017;
Skim and whole milk powder will be removed over 12 years; and
There are mechanisms to delay the tariff reductions if exports exceed certain quantities.
MEAT
Tariffs on beef and sheep meat, and edible offal will be removed over nine years.
FRUIT
Apple tariffs will be removed by 2012 and kiwifruit over eight years.
WOOL
A duty-free quota of 25,000 tonnes of wool and 450 tonnes of wool tops will be set, increasing by 5 per cent a year for eight years. The initial quota is 75 per cent of current exports or $122 million a year in tariffs.
WOOD AND PAPER
China will be bound on the zero tariff on logs and sawn timber and a limited number of pine products will also be given preferential status.
Some processed wood and paper products accounting for 4 per cent of exports to China will not be covered by the deal. This is because under WTO rules if China gives preferential status on the products, they must be applied to all WTO members.
WHAT CHINA GETS
All tariffs will be removed by 2016;
Currently 37 per cent of China's exports to New Zealand are tariff free;
An additional 2 per cent of exports with a tariff of 5 per cent or less will be duty free from October 1;
Tariffs on most textile, apparel, footwear and carpet products will be phased to zero over seven years or nine years. Tariffs on heavily exported goods in clothing and footwear will be phased out by 2016, lesser traded goods by 2014; and
Tariffs on all other goods (including steel, whiteware, plastics and furniture) will be mostly phased out by 2012 with the rest by 2013.
* THE LONG MARCH TO FREE TRADE
1949 - The Communist Party under the leadership of Mao Zedong founds the People's Republic of China.
1972 - New Zealand under Norman Kirk becomes the first developed nation to recognise China.
1979 - Premier Deng Xiaoping begins the process of opening up China to economic reform and moves away from a centrally-controlled economy to a market-based system. By 2005 China's economy quadruples in size.
1989 - The massacre of pro-democracy demonstrators in Tiananmen Square results in New Zealand suspending ministerial and senior official visits for a year.
2002 - Hu Jintao becomes China's President and the pace of high-level visits between the two countries picks up.
October 2003 - President Hu and Prime Minister Helen Clark agree to negotiate a trade and economic framework.
May 2004 - A framework is agreed, New Zealand recognises China as a market economy and agrees to look at the idea of trade talks.
November 2004 - Clark and President Hu agree that trade talks should begin.
December 2004 - First round of negotiations begin.
April 2006 - Clark and Premier Wen Jiabao meet in Wellington, and agree the deal will be concluded within two years.
December 2007 - The 15th round of negotiations take place.
March 2007 - Both countries finalise agreement.
April 6, 2007 - Deal signed.
- NZPA
* Ian Llewellyn is in Beijing with the assistance of the Asia New Zealand Foundation.
