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Following the US trade war, China has signed several trade and investment agreements to bolster its multilateral credentials.
China and New Zealand have signed an agreement that updates their existing free trade pact, giving the Pacific nation’s exports greater access to the world’s second-largest economy.
New Zealand Prime Minister Jacinda Ardern confirmed the signing of an expanded trade deal with China on Tuesday, noting its importance amid the coronavirus pandemic.
The agreement comes as Beijing seeks to establish itself as a staunch defender of multilateralism following a forceful trade war with the United States and while the coronavirus keeps international borders closed.
“China remains one of our most important trading partners … That this happens during the global economic crisis triggered by COVID-19 makes it particularly important,” Ardern said at a press conference.
The deal extends an existing trade deal with China and ensures that it remains fit for purpose for another 10 years, New Zealand Trade Minister Damien O’Connor said in a statement.
Under the new agreement, tariffs will be eliminated or lowered for many of New Zealand’s mainly commodity-based exports, including dairy, lumber and seafood. Compliance costs will also be reduced.
The agreement also includes commitments from both parties to promote environmental protection and not lower standards to obtain a commercial or investment advantage.
China’s multilateral push
After years of pressure from the administration of former US President Donald Trump on trade and, more recently, international scrutiny on handling the coronavirus, China has become a surprising champion of globalization and multilateralism.
In recent months, Beijing signed an investment pact with the European Union and joined the world’s largest free trade bloc in the 15-country Regional Comprehensive Economic Partnership (RCEP), which also includes New Zealand.
China has also expressed interest in joining the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the successor to a previous pact from which Washington withdrew.
Speaking at a virtual meeting of the World Economic Forum on Monday, President Xi Jinping criticized isolationism and “Cold War” thinking and called for the removal of barriers to trade, investment and technological exchange.
Under its new agreement with Wellington, China will also open sectors such as aviation, education and finance. In exchange, New Zealand will increase visa quotas for Chinese teachers and tour guides, China’s official Xinhua news agency reported on Tuesday.
New Zealand was the first developed country to sign a free trade agreement with China in 2008 and Beijing has long been touted as an example of Western compromise.
Chinese Prime Minister Li Keqiang (left) welcomed New Zealand Prime Minister Jacinda Ardern (right) to the Great Hall of the People in Beijing on April 1, 2019. [File: Jason Lee/Reuters]
China is now New Zealand’s largest trading partner, with annual two-way trade of more than NZ 32 billion ($ 21.58 billion).
But ties have been put to the test under the Ardern government when New Zealand criticized China’s influence on the small Pacific islands and raised human rights concerns about Uighur Muslims. Ardern also backed Taiwan’s participation in the World Health Organization (WHO) despite a warning from Beijing.
The trade pact with New Zealand also comes as Beijing’s ties with neighboring Australia worsened after Canberra requested an independent investigation into the origins of the coronavirus pandemic, which was first reported in central China.
Australia has asked the World Trade Organization to review China’s decision to impose heavy tariffs on Australian barley imports.
New Zealand, which will host the Asia Pacific Economic Cooperation regional summit this year, has said it would be willing to help negotiate a truce between China and Australia.
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