Beginning in 2024, New Zealand’s dairy industry celebrates a significant achievement as its products now enter the Chinese market without duty. This marks the culmination of tariff removals under the Free Trade Agreement (FTA) with China, New Zealand’s top trading ally. The move, reflecting deepened cooperation, follows New Zealand’s status as the first developed nation to sign an FTA with China and its subsequent upgrade in January 2021, focusing on dairy products.
Chinese experts view this development as a sign of China’s continued market liberalization, beneficial to international trading spheres, especially trusted partners. They regard this as the initial stage of a growing economic relationship, predicting future enhancements in policies for personnel exchanges and broader cooperation realms like tourism and education.
New Zealand confirmed on Monday that its entire range of dairy products would now enjoy duty-free entry into China, as the last of the safeguard duties on milk powder ceased on December 31, 2023. This event marks the completion of tariff removals under the trade deal. As reported by Reuters, New Zealand Trade Minister Todd McClay expressed that this milestone is poised to generate annual tariff savings of approximately $221 million (NZ$350) million.
The FTA’s recent implementation underlines the mutual economic benefits for both countries. Chen Hong, from the New Zealand Studies Centre at East China Normal University, pointed out the global recognition of New Zealand’s dairy goods and the rising demand for premium products among Chinese consumers.
China, New Zealand’s most significant trading partner, saw bilateral trade surpass $25 billion (NZ$40 billion) in 2022. Recent data shows that New Zealand has been shipping an average of 1.4 million tons of dairy products annually to China in the past three years, valued at about NZ$8 billion, with milk powder comprising nearly half of this export volume.
The privilege of duty-free dairy imports is another step in China’s trajectory toward more open markets and inviting more quality goods into its domain. This approach also aims to distribute the gains from China’s market growth, as noted by Chen.
The future of economic cooperation in 2024 appears promising. Wang Jiazheng, from the Guangdong Economic and Trade Representative Office in New Zealand, suggested expanding the partnership beyond trade to incorporate burgeoning sectors like the digital economy, e-commerce, and artificial intelligence.
After a challenging economic year in 2023, New Zealand views this reinforced cooperation as crucial for spurring economic growth for both nations and aiding New Zealand’s recovery from the recent economic downturn.
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