N.Z., China sign trade framework agreement

Asian Economic News, June 1, 2004

SYDNEY, May 28 Kyodo

New Zealand and China took the first formal step toward a free trade agreement with the signing of the Trade and Economic Cooperation Framework in Auckland on Friday, the New Zealand government said.

The framework was signed by New Zealand Trade Negotiations Minister Jim Sutton and China's Commerce Minister Bo Xilai.

New Zealand Prime Minister Helen Clark said, ''This document lays the foundations for future economic and trade cooperation, by committing our countries to begin negotiations next year for a free trade agreement.''

''Closer trading ties between New Zealand and China offer substantial benefits to existing New Zealand exporters and will open up new opportunities for us in the primary, secondary and service export sectors,'' she said in a statement.

Sutton said New Zealand and China will now begin a joint feasibility study on a possible FTA expected to be completed by the end of the year.

''It will include extensive public consultation and help shape New Zealand's position for FTA negotiations commencing early in 2005,'' he said in a statement.

China is New Zealand's fourth-largest trading partner, importing NZ$1.38 billion (about $870 million) in goods and more than NZ$1 billion in services.

New Zealand is the first developed country China has agreed to negotiate an FTA with.

New Zealand will recognize China as having established a market economy system in the FTA talks, a precondition set by China in agreeing to negotiations.

The Australian government is conducting a study on China's market economy status. It is due to be completed by October and could open the door to bilateral FTA negotiations.