The New Zealand Government is beaming with pride after signing a historic trade pact with China, while the Tibetan crisis rages on. But not long ago, Pacific nations were criticised for their own political dealings with China. So do terms like ‘cheque book diplomacy’ apply to Kiwis too?
Pacific nations have often been criticised for their dealings with China. The word “cheque book diplomacy” meaning a trade off of promised funding in return for political support, is often bandied around as China competes with Taiwan to spread their influence in the region. But is New Zealand guilty of the same after signing a free trade agreement with China, while the current Tibetan crisis rages on?
The New Zealand Government has side-stepped pressure from the Free Tibet human rights campaign to sign a historic free trade agreement with economic superpower China. The signing, which took place at the Great Hall of the People in Beijing and overseen by prime minister Helen Clark and trade minister Phil Goff, is the first free trade agreement China has signed with any developed nation.
New Zealand business chiefs are already licking their lips at the prospects for exporters. "It's a huge day for Kiwi business," says Business NZ chief executive Phil O'Reilly.
China’s top brass has already indicated they wanted the new trade relationship to go beyond agricultural commodities into new areas such as co-operation on climate change policies and technology to mitigate carbon exposure.
China has agreed to a sweeping programme of tariff reductions that will ultimately result in 96 per cent of New Zealand's exports to it being tariff-free.
The first tariff cuts will start on October 1, once Parliament gives its formal approval.
The agreement is expected to be worth up to NZ$350 million a year to New Zealand through tariff reductions and market openings.
Some have criticised the trade pact has come at the expense of New Zealand’s silence on the current Tibetan crisis. Clark has defended the government’s actions saying there was “no cross over” between the trade deal and the crackdown on Tibetans by China.
BACKGROUND (source: Ministry of Foreign Affairs)
New Zealand is the first developed country to negotiate a free trade agreement with China.
Securing preferential access to China's economy has the potential to deliver significant gains to our exporters. It is the fastest growing major economy, currently growing at 9.5 per cent per annum. China is our fourth largest trading partner, taking over $1.6 billion of New Zealand's merchandise exports and over $1 billion of services. China's middle class is now estimated to be more than 100 million people and growing - which will fuel the demand for New Zealand's agricultural products. There should also be gains to New Zealand's manufacturers and services operators.
Other countries are also lining up to negotiate preferential trade agreements with China. New Zealand's negotiations with China will keep our exporters in the 'game' and help defend existing market shares - particularly in areas where China is already New Zealand's largest international customer - such as milk powder, wool and education.
