November 9, 2006

New Zealand hopes for free trade with China
 

New Zealand trade minister Phil Goff has been reassuring China there was nothing to fear from the elimination of dairy tariffs.

After making headway in establishing a free trade area during the ninth round of negotiations, the two countries would now proceed for the 10th round of talks, to be held in January.

With this, New Zealand would become the first OECD country to have an FTA with China.

China's dairy market soared to 25 million tonnes a year with New Zealand being the major supplier of imported product

Goff pointed out though there was goodwill on both sides, a deal had to be fair to both countries, China's

dairy tariffs remained an issue, he said adding New Zealand was realistic and realised tariffs had to be phased out over time.

China might feel threatened by New Zealand's highly efficient dairy industry and fear it would damage efforts to build up their own dairy sector, Goff said, clarifying New Zealand had no intention of doing so.

He said New Zealand wanted to work in partnership with China to expand a market that was already growing faster than production from both countries could meet. He insisted it could be a win-win situation for both.

In the decade that China had cut dairy tariffs from 65 per cent to 10 per cent, production had doubled and prices risen 23 per cent, he noted.