Fonterra has welcomed Prime Minister John Key’s announcement at APEC of the launch of China NZ FTA upgrade negotiations. The announcement followed a positive bilateral meeting between Trade Minister Todd McClay and Chinese Commerce Minister Gao Hucheng.
Fonterra Chairman John Wilson said, “The upgrade of the FTA provides an opportunity to strengthen the already strong dairy relationship between New Zealand and China. I am pleased that the leadership of both countries recognise the value of continuing to improve the FTA. We are committed to continuing to build our business in China and the FTA will remain the key platform for that growth.”
Fonterra has operated in China for more than 40 years, and has developed an integrated business strategy encompassing farms, ingredient products, foodservices and consumer brands including Anchor, Anlene and Anmum.
China is New Zealand’s largest dairy export market with NZD $2.7 billion worth of trade in 2015. Fonterra has substantial investments on the ground in China, including a strategic partnership with Beingmate, a leading Chinese infant and child food manufacturer. It has completed two farming hubs and is working on a third in partnership with Abbott. Fonterra employs more than 1,500 people in China. Fonterra is also the leading premium imported dairy provider in the foodservices sector in China.
The Prime Minister’s announcement followed a meeting this morning with Trade Minister Todd McClay and Chinese Commerce Minister Gao Hucheng at the APEC Summit in Lima, Peru. Mr Key and President Xi welcomed the commitment to an upgrade at the APEC Leaders’ retreat today.
“New Zealand was the first developed country to negotiate and conclude an FTA with China, and I’m pleased that today we have reached the fifth ‘first’ in our relationship, as the first developed country to launch an upgrade of an FTA,” says Mr Key.
“It has been eight years since our FTA with China came into force and it has exceeded all expectations. It has an enviable record and showcases to the world the importance of trade liberalisation.
“The upgrade will be an opportunity to deepen and broaden our comprehensive strategic partnership.
“It will ensure that our FTA continues to drive our relationship forward and takes into account the FTAs that China has negotiated with other trading partners since 2008.”
The negotiations will look to improve or enhance the broad range of areas already covered by the FTA. This gives either party the ability to raise issues of importance to them, and includes technical barriers to trade, customs procedures, cooperation and trade facilitation, rules of origin, services, and environmental cooperation. It will also address a number of newer areas such as competition policy and e-commerce.
A first round of negotiations will be held in the first half of 2017.
China is New Zealand’s second-largest goods and services export market and our largest export destination for goods. In the year ending June 2016, the value of goods and services exports totalled $12.2 billion.
Since the FTA, New Zealand’s goods exports to China have quadrupled, reaching $9.2 billion, and services exports have tripled, reaching $3.0 billion.