New Zealand and China Free Trade Agreement

Monday 21st April 2008

On 7 April 2008 New Zealand and China signed a free trade agreement (“the agreement”).  The agreement is said to provide mutually beneficial concessions in the areas of trade of goods, services and investment and New Zealand is the first country to enter in to any sort of free trade agreement with China.

The agreement refers specifically to the importance of intellectual property rights in “promoting economic and social development, particularly in the new digital economy, technological innovation and trade”.

Under the agreement each party must establish and maintain transparent intellectual property rights regimes as well as reaffirming its commitment to an international intellectual property rights agreement, Trade Related Aspects of Intellectual Property (TRIPS), which provides that members of the
World Trade Organisation must maintain basic minimum intellectual property rights regimes.  The TRIPS Agreement is specifically incorporated into and made part of the agreement.

The parties agree to co-operate in eliminating trade in counterfeit goods.  This may be viewed as a hollow promise on China’s part given the scale of China’s counterfeiting trade.  Anecdotal evidence is that China is the world’s single largest manufacturer of counterfeit goods, with the vast majority of counterfeit goods coming out of China.

The Agreement also comes at a time when China is under the spotlight for both human rights and environmental abuses particularly as the Beijing Olympics draws closer.

In real terms however it promises to remove tariffs on 96% of New Zealand exports to China and to save NZ$115.5 million on duty based on current trade.  This is significant given that China is currently New Zealand’s fourth largest export market behind Australia, the United States and Japan. 

The agreement has highlighted the need, more than ever, for New Zealand businesses who intend to trade in China to protect their intellectual property rights in China.

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