SOURCE / GT VOICE
GT Voice: Upgraded FTA with NZ a wake-up call for Australia
Published: Jan 26, 2021 09:03 PM

Photo: cnsphoto

New Zealand's deepening economic and trade cooperation with China will probably make exporters in neighboring Australia envious. On Tuesday, China's Commerce Minister Wang Wentao and his New Zealand counterpart signed an upgrade to their existing free trade agreement in a sign of expanding economic cooperation when it comes to trade practices.

With the global trade severely contracting amid the pandemic pummel, it goes without saying that the new trade deal will be of great significance to New Zealand in terms of gaining increased access for its exports to one of the world's largest consumption markets. 

China has been New Zealand's largest trading partner since 2017, with bilateral trade volume reaching more than $18.1 billion in 2020, according to data from China's customs authorities.

It is conceivable that the upgraded trade agreement will benefit New Zealand exporters of agricultural, dairy and seafood products by reducing compliance costs.

On the other hand, the trade deal, which comes as the China-Australia relationship has sunk to its lowest point in decades, may upset some Australian exporters from the primary sector industries. 

Given the fact that there is competitive relationship between agricultural and dairy goods exports from New Zealand and Australia to China, the new free trade agreement signed by New Zealand will undoubtedly give its products some edge over Australia's in the Chinese market. 

Such development could be interpreted by some as indirect pressure on Australian exports at a time when Canberra is overly sensitive about any setback in its trade with China due to their fraught relations.

Yet, it should be noted that the upgraded trade ties between China and New Zealand is the result of sound bilateral economic and trade cooperation, serving the common interests of businesses and people of the two countries. 

The new deal is not aimed at any third country, so there is no need to politicize its purpose. Over the past year, China has been actively exploring the potential of economic and trade cooperation with the rest of the world and striving to advance relations with its trading partners. 

The signing of the Regional Comprehensive Economic Partnership, the China-EU comprehensive investment agreement, and the upgraded free trade deal signed with New Zealand are sufficient to demonstrate China's commitment to multilateralism and free trade.

Fundamentally, China's trade relation with any other third country is not the cause of trade tensions with Australia. If China-Australia relations were on a normal track, New Zealand's exports to China would not trigger any sense of crisis among Australian businesses.

The current difficulties facing bilateral relations are of Australia's own making. Only a real change in Canberra's hostile attitude towards China can ease the tensions, and reset bilateral trade ties between the two sides.
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