Today New Zealand signed a free-trade agreement with China. This is the first free-trade agreement that China has ever signed with a western, capitalist, democratic country but in the future China hopes to sign more trade deals with other western countries so this agreement is a trial.
The Prime Minister, Helen Clark, signed the agreement with Chinese Premier Wen Jiabao in the Great Hall of the People in Beijing. Helen Clark was accompanied by more than 200 New Zealanders – politicians from both the Labour and National Parties, members of the media, but mostly business people.
The details of the agreement were secret until today but we now know that the main change will be that import taxes will gradually disappear. Today New Zealand farmers pay between 12% and 25% to export dairy products and meat to China each year but these taxes will be lower and finally they will disappear. Chinese manufactured goods do not have as much tax on them at the moment but this will also completely disappear in a few years.
Another part of the agreement is to allow Chinese workers to come to New Zealand for 3 years. They will be workers in Chinese industries like chefs for Chinese restaurants, tourist guides, people who practise Chinese medicine and martial arts coaches. Workers to help pick apples and grapes will also be allowed to come here for short periods and also Chinese skilled workers for jobs where there are vacancies.
New Zealand has worked hard to get this agreement. The government says that our exports of meat and dairy products will increase by 8 times. China is already our 4th largest export country. Because of the economic problems in the US, New Zealand has been looking for other markets and China, with its fast-growing middle class, is very attractive to farmers and business people here. New Zealand is also looking to Malaysia and India for future markets, so this agreement with China is a good beginning.
New Zealand is a very small market for China but the Chinese government has welcomed this free-trade deal. China is also looking to other markets in the future, to Australia and Europe. If the arrangement with New Zealand works well, other western countries might be interested in signing agreements with China.
The Green Party is against this free-trade agreement partly because of the way China has treated people in Tibet in the last few weeks. Some workers in clothing and footwear factories are worried that more cheap Chinese imports will mean that nobody will buy New Zealand goods and they will lose their jobs. Other people are worried about Chinese workers taking the jobs of New Zealanders. |