MercoPress. South Atlantic News Agency

New Zealand breaks ground signing free trade pact with China

New Zealand became on Monday the first developed nation to sign a free-trade agreement with China. Prime Minister Helen Clark and her Chinese counterpart Wen Jiabao, witnessed the signing of the pact in Beijing's Great Hall of the People.

Trade between the two countries is currently worth about 6.1 billion US dollars annually with exports from China making up about 75% of that total. Tariffs on New Zealand's exports, which include dairy products and lamb will be reduced or abolished. Analysts said the pact was PM Clark's biggest foreign policy achievement since she took office in 1999. NZ Prime Minister Helen Clark said that the agreement, reached after three years of talks, was a "very significant achievement", adding that "it opens up new opportunities for businesses looking to engage with, or grow their existing links with, China". Chinese Premier Wen Jiabao said the deal would "bring our friendly relationship even closer and deliver tangible benefits to both our countries". Wen said the signing marked "a day of historical significance" and the two nations had "met the goal" they set of achieving a trade agreement after 15 rounds of negotiations over three years. The visit of Ms Clark to Beijing was among the first by Western leaders since last month's outbreak of anti-government rioting in Tibet. The agreement covers not just merchandise trade but also services. China sends more students to study in New Zealand than any other country and is its fourth-largest source of tourists. In a government statement released in Wellington, Clark said the agreement was expected to lift New Zealand's exports to China by 180 million to 280 million US dollars a year. The pact provides for long periods of transition to enable sensitive industries on both sides to adapt to the added competition to come from the abolition of import taxes. About one-third of New Zealand's exports to China would become duty-free later this year, another third in five years and 96% of all goods would be tariff-free by the end of the transition period in 2019. New Zealand's remaining duties on Chinese carpets, clothing and shoes would be phased down and abolished by 2016. A key part of the pact allows up to 1.800 skilled Chinese workers in specialty fields like practitioners of traditional medicine, Mandarin-language teachers, chefs and martial arts teachers to work in New Zealand each year. In addition, up to 1.000 skilled young Chinese a year would be able to enter New Zealand on working holidays. In a bid to appease critics of Chinese labour and environmental practices, Clark said the two countries had also signed binding agreements aimed at encouraging dialogue and cooperation in those areas. Clark's Labour Party-led coalition shrugged off opposition to the pact from the Green and Maori parties in parliament, and Revenue Minister Peter Dunne, who leads the United Future party, turned down her offer to go to Beijing for the signing, citing recent Chinese actions in Tibet. China already has free trade agreements with Chile and Pakistan and is holding negotiations with Peru, Australia and Iceland among others.