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China and New Zealand Signed the Upgrade Protocol of Free Trade Agreement

Compared with the FTA signed in 2008, terms related to dairy products almost remained unchanged in the upgrade protocol, but it showcased a positive trade relation between China and New Zealand, which will further benefit the dairy trading in the near future.

On Jan. 26, 2021, China and New Zealand signed a protocol on upgrading their 12-year-old free trade agreement 1. Apart from improving rules of origin, customs procedure and trade facilitation measures, technical trade barriers, trade in services, and collaboration, the protocol newly includes e-commerce, government procurement, competition policy, environment and trade to fit the latest business environment. In addition, China and New Zealand also agreed to facilitate cosmetic trade, reduce tariff on wood and paper products from New Zealand and etc.

According to China-New Zealand Free Trade Agreement signed in 2008 2, the tariffs on various dairy products imported by China from New Zealand have been reduced year by year since 2008, and the agreement tariff on all dairy products from New Zealand reduced to zero in 2019. To ease the impact of New Zealand dairy products on China's dairy industry, the Agreement sets special agricultural safeguard measures and corresponding annual trigger levels for NZ dairy products that are under 11 HS codes. The current terms for dairy products remain in the upgrading protocol, that is, the safeguard duty for most dairy products will be removed within one year and that for milk powder will decrease to zero within three years. It means that all dairy products imported from New Zealand to China will be exempted from tariff starting from Jan. 1st, 2024.

Although there isn’t substantial change for the trade of dairy products, it showcases a positive trade relationship between China and New Zealand. Undoubtedly it will further benefit the dairy imports from New Zealand in the upcoming years.

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