Question: Regarding the entry into force of the "Upgrading Protocol" and the "China-New Zealand Free Trade Agreement" since its entry into force in 2008, what achievements have been made?
Answer: On April 7, 2022, the "Protocol between the Government of the People's Republic of China and the Government of New Zealand on Upgrading the Free Trade Agreement between the Government of the People's Republic of China and the Government of New Zealand" (hereinafter referred to as the "Upgrading Protocol") will come into effect, which will further expand the market opening of China and New Zealand under the FTA and improve the level of relevant rules. The effective implementation of the "Upgrade Protocol" reflects the willingness and determination of China and New Zealand to attach great importance to and jointly commit to deepening free trade cooperation, so as to further promote bilateral trade and investment exchanges, and promote the development of bilateral economic and trade relations to a higher level.
The "China-New Zealand Free Trade Agreement" (hereinafter referred to as the "China-New Zealand Free Trade Agreement") was signed and entered into force in 2008. It is the first free trade agreement signed between my country and a developed country. As of 2019, the tax reduction arrangements under the agreement have completed the transition period and have been fully implemented. On January 26, 2021, China and New Zealand formally signed the "Upgrade Protocol".
Since the "China-New Zealand Free Trade Agreement" came into effect, bilateral trade has achieved rapid growth. China has been New Zealand's largest trading partner, largest export market and largest source of imports for many years. In 2021, the bilateral trade volume between China and New Zealand will hit a new high, reaching US$24.72 billion, a year-on-year increase of 36.4%, which is about 5.6 times the bilateral trade volume at the beginning of the signing of the free trade agreement in 2008. The implementation of the agreement has greatly promoted the growth of trade between the two countries, deepened practical cooperation between the two sides in various fields, and enriched and enriched the connotation of China-New Zealand comprehensive strategic partnership.
Q: What are the main contents of the Upgrade Protocol?
A: The "Upgrade Protocol" is a high-level free trade agreement reached on the basis of the "China-New Zealand Free Trade Agreement" that complies with modern international economic and trade rules. The "Upgrade Protocol" covers a wide range of issues and achieves mutual benefit for both parties. It will provide strong support for the two countries to further deepen trade and investment exchanges and stabilize cooperation in the industrial and supply chains.
(1) Further expand market opening.
In the field of trade in goods, in the "China-New Zealand Free Trade Agreement", China and New Zealand have achieved a high level of liberalization, reaching 97% and 100% of the zero-tariff level respectively. In order to stabilize and expand import sources and promote green and sustainable development, China promised in the "Upgrade Protocol" that it will gradually eliminate tariffs on 12 newly imported tax items of wood and paper products within 10 years, mainly including wood fiberboard, napkins, writing paper, kraft paper, adhesive paper, cardboard and paper labels.
In the field of trade in services, the two sides have made greater commitments on market access, greatly expanding the coverage of most-favored-nation commitments. China has expanded its opening to New Zealand in aviation, construction, shipping, finance and other fields, especially in the field of aviation services, and has added new commitments to airport operation services, ground services and professional aviation services. Singapore has increased the level of openness in areas such as legal services, engineering and centralized engineering services, and has added a commitment to fully open management consulting and all related services. New Zealand has also improved its commitments in the China-New Zealand Free Trade Agreement on work permit arrangements for Chinese characteristic jobs, and increased the quota for Chinese language teachers and Chinese tour guides who have a large number of applications from Chinese citizens to work in New Zealand.
In the field of investment, Singapore has significantly relaxed the review threshold for Chinese investors, giving Chinese investors the same review threshold treatment as members of the "Comprehensive and Progressive Trans-Pacific Partnership Agreement" (CPTPP). Chinese investors will be freer and more convenient to invest in the new investment than before.
(2) Improve trade facilitation rules.
In terms of rules of origin, the "Upgraded Protocol" has improved the provisions of direct transportation terms, introduced the self-declaration system for the origin of approved exporters, and added provisions such as reissuance of certificates of origin, exemption from submitting origin documents, and an online verification system, which greatly facilitated trade enterprises to use the agreement to enjoy benefits. The two sides will also set up a rules of origin committee to promote more standardized and effective implementation of rules of origin.
In terms of customs procedures and trade facilitation, the two sides promise to release goods quickly if the corresponding conditions are met, and release perishable goods within 6 hours as much as possible; promote the transparency of trade management documents, and recognize that electronic and paper documents have the same effect; use risk management, information technology and other means to provide more efficient and fast customs clearance services for enterprises of both parties.
In terms of technical barriers to trade, the two sides have expanded the scope of institutional cooperation in product conformity assessment procedures, and added new terms such as border measures, signs and labels, and upgraded the procedural regulations for product entry.
(3) Strengthen cooperation on post-border rules.
The "Upgraded Protocol" upgraded the cooperation chapter of the original agreement, and added four new chapters including e-commerce, government procurement, competition policy, environment and trade, and reached high-level economic and trade rules in a wide range of fields.
In the field of cooperation, new agricultural cooperation clauses will be added, and a closer and deeper partnership will be established in areas such as agricultural science and technology cooperation. In the field of e-commerce, the inclusion of electronic authentication and digital certificates, online consumer protection, online data protection, paperless trade, unsolicited commercial electronic news, etc. will jointly promote the development of markets by enterprises of the two countries, especially small and medium-sized enterprises, through e-commerce. In the field of government procurement, both sides have recognized the importance of improving the transparency of laws, regulations and procedures, established a framework to strengthen cooperation in government procurement, and agreed to start government procurement negotiations including market access in due course in the future. In the field of competition, prohibit anti-competitive business practices, protect the fair competition environment in the market, and improve economic efficiency and consumer welfare. Both parties commit to follow the principles of transparency, non-discrimination and procedural fairness in the process of competition law enforcement. In the field of environment and trade, the two sides promised to effectively implement environmental measures, not to encourage trade and investment by lowering the level of environmental protection, and not to use environmental standards for the purpose of trade protectionism, and to evaluate environmental impacts in due course to continuously deepen cooperation in this field.
Q: What is the role of the "Upgrading Protocol" in deepening China-New Zealand economic and trade relations?
A: President Xi Jinping pointed out in a phone call with New Zealand Prime Minister Ardern in November 2021 that the two sides should leverage their complementary strengths, expand economic and trade cooperation, and maintain the stability of the industrial and supply chains. The leaders of the two countries reached an important consensus on the healthy and stable development of China-New Zealand relations under the new situation.
The market opening commitments and high-level rules reached in the "Upgrade Protocol" provide important opportunities for the two countries to further expand economic and trade cooperation: First, promote the development of trade in goods. The reduction of tariff and non-tariff trade barriers and the implementation of trade liberalization and facilitation rules are conducive to further reducing trade costs, improving customs clearance efficiency, expanding trade scale, and stabilizing and strengthening industrial and supply chains. The second is to expand the field of service investment cooperation. The two sides have newly opened up departments for trade in services, and New Zealand has also significantly relaxed the review threshold for Chinese investors, which will help reduce the institutional transaction costs for Chinese companies investing in New Zealand, create a more transparent, stable and predictable investment environment, and further stimulate the potential for bilateral cooperation in service trade and investment. The third is to open up new space for economic and trade cooperation. The "Upgraded Protocol" benchmarks international high-standard economic and trade rules, and adds a series of post-border cooperation and discipline clauses including e-commerce, which is conducive to the cooperation between the two sides in a wider range of economic and trade fields such as digital trade, and jointly enhances international economic competitiveness. It also lays a good foundation for the two sides to negotiate and sign higher-level bilateral and regional free trade agreements in the future. The "Upgrading Protocol" came into effect on the occasion of the 50th anniversary of the diplomatic relationship between China and New Zealand. It is a concrete measure to implement the consensus reached by the leaders of the two countries, and fully reflects the positive willingness of the two sides to further strengthen and expand bilateral economic and trade cooperation through deepening the free trade partnership.
China is willing to work with New Zealand to implement the "Upgrade Protocol" with high quality, give full play to the role of the agreement in stimulating trade and investment between the two countries, fully release the dividends of high-level opening policies, and help the high-quality development of economic and trade relations between the two countries. According to the "Upgrade Protocol", China and New Zealand should carry out negotiations on the negative list of trade in services within two years after the agreement takes effect. The Chinese side will maintain close communication with the New Zealand side on this, start the above-mentioned follow-up negotiations on time, further expand the two-way market opening, create better institutional guarantees for trade and investment between the two countries, fully release the potential of economic and trade cooperation between the two countries, and contribute to the healthy and stable development of China-New Zealand comprehensive strategic partnership.
Q: What are the positive effects of the "Upgrade Protocol" on the implementation of the free trade zone upgrade strategy?
Answer: The Party Central Committee and the State Council attach great importance to the construction of free trade zones. The Fifth Plenary Session of the Nineteenth Central Committee of the Communist Party of China proposed to implement the strategy of upgrading free trade zones and build a network of high-standard free trade zones facing the world. The Sixth Plenary Session of the Nineteenth Central Committee of the Communist Party of China specifically mentioned that a network of high-standard free trade zones facing the world should be built to continuously enhance our new advantages in international economic cooperation and competition.
The effective implementation of the "Upgrade Protocol" is an important measure to implement the relevant arrangements of the Party Central Committee and the State Council: On the one hand, the "Upgrade Protocol" actively explores a higher level of market opening. In the field of trade in goods, on the basis of the "China-New Zealand Free Trade Agreement", the scope of zero-tariff products will be further expanded; the level of opening up in service trade will be "RCEP+". On the other hand, the Escalation Protocol actively incorporates higher-level rule provisions. Newly added rules and regulations in four fields including e-commerce, government procurement, competition policy, environment and trade, among which the chapter on environment has exceeded the level of RCEP, laying a good foundation for my country's free trade agreement to further upgrade to a higher standard and a wider range of fields.
In short, the effective implementation of the "Upgrading Protocol" has taken a new step in the implementation of the free trade zone upgrading strategy. It will further deepen the trade and investment exchanges between China and New Zealand and practical cooperation in various fields, and help us make better use of domestic and international markets and resources. Deeply promote high-level institutional opening up and serve to build a new development pattern.
