New Zealand said on Monday all its dairy products were now able to enter China duty-free as safeguard duties on milk powder ended on Dec. 31st, marking the removal of all remaining tariffs agreed upon in the free trade deal between the two countries.
Safeguard duties are emergency tariffs that countries use to shield domestic industries against intense competition from a sudden surge in imports of a particular product.
New Zealand was the first developed country to sign a free trade agreement with China in 2008, with imports of milk powder subjected to the longest phase-out. An upgraded trade deal was entered when former Prime Minister Jacinda Ardern met President Xi Jinping in 2022.
The removal of tariffs on milk powder means all New Zealand dairy products can now enter China duty-free.
This deal was part of the New Zealand-China Free Trade Agreement, which was first negotiated in 2008.
Trade and Agriculture Minister Todd McClay said it was a landmark day.
“It’s really good news not only for dairy farmers but also for the New Zealand economy. “$350 million worth of additional revenue delivered to New Zealand as a result of the FTA finally entering into force, it’s a day for celebration, but still a lot more work to do … a lot more we can export.”
Federated Farmers president of Marlborough Evan White said the removal of tariffs would benefit New Zealand communities.
“It puts more money back in the pockets of the dairy farmers, which in turn will get spent in the town, in the community, in the country.”
McClay said China was a valuable trading partner for the country.
“They take about $8 billion worth of dairy products from New Zealand but across the primary sector they are big importers.
China was also responsible for a lot of jobs in New Zealand’s economy, said McClay.
New Zealand’s annual dairy exports to China have averaged 1.4 million tonnes each year over the past three years, around half of which was milk powder.
FTAs currently in force covered two-thirds of New Zealand’s exports.
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