April 8, 2008

 

China to eliminate tariffs on 96 percent of New Zealand exports

 

 

China will eventually remove tariffs on 96 percent of New Zealand exports when the trade deal between the two countries comes into force in October 2008.

 

Some dairy products, including 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, while skim and whole milk powder will be removed over 12 years.

 

Meanwhile, tariffs on beef and sheep meat will be removed after nine years.

 

The deal will give a "favoured nation status" on New Zealand, giving exporters easier access to markets and less stringent non-tariff barriers.

 

Tariffs at or below 5 percent on exports will be cut to zero. This will cover more than US$200 million worth of goods and means 35 percent of trade with China will be tariff-free from day one.

 

Within five years China's tariffs on goods in the six to 20 percent range will be eliminated.

 

This will mean another 31 percent of total exports to China will be tariff-free by 2013.

 

Analysts say that New Zealand trade returns with China could increase by up to US$350 million in addition to the tariff savings of more than US$100 million.

 

From this trade deal, all tariffs on China will be removed by 2016.

 

Currently, 37 percent of China's exports to New Zealand are tariff free, so an additional 2 percent of exports with a tariff of 5 percent or less will be duty free from October 1.