Chinese Ambassador to New Zealand Talks Up FTA Prospects – Report

WELLINGTON -(Dow Jones)- New Zealand has a “strong chance” of becoming the first Western nation to sign a free-trade agreement with China, the communist state’s ambassador to New Zealand has told a local newspaper.

There is an excellent level of goodwill between the two nations and New Zealand’s firm adherence to the One China policy is “very important to us,” Chinese Ambassador Chen Mingming said in an interview published in the New Zealand Herald newspaper Thursday.

“If it pushes hard enough and really takes full advantage of the momentum there is a strong chance New Zealand will be the first Western nation to get a free-trade deal with China,” Chen said.

“My impression is that the (New Zealand) government is giving a lot of priority to it,” he said, but warned that New Zealand’s dairy, pastoral farming and forestry industries don’t appear to be lobbying the government hard enough.

New Zealand’s bilateral free-trade hopes were previously pinned on an agreement with the U.S. but any prospect of negotiations has foundered on New Zealand’s opposition to the war on Iraq (news – web sites) and stiff opposition from U.S. dairy farmers who fear competition from New Zealand’s highly competitive dairy industry.

Publication of the interview follows New Zealand Prime Minister Helen Clark earlier this week trying to play down media speculation that New Zealand would be the first Western country to strike a free-trade deal with China.

Predictions that free-trade negotiations with China could begin in 2005 are ” running a bit ahead of things,” Clark said Wednesday at a news conference in Canberra after an annual bilateral meeting with her Australian counterpart John Howard.

“It’s impossible to say that any one country will be the first to strike a deal because China will be talking with a lot of players, and you cannot assess at what rate talks will go with individual countries or groupings of countries,” she said.

New Zealand exported NZ$1.4 billion of goods to China in calendar 2003, making the communist state New Zealand’s fourth biggest export market after Australia, the U.S. and Japan. New Zealand’s imports from China in the same period totaled NZ$2.9 billion.

Though New Zealand, with a population of just 4 million, is dwarfed by China with its population of more than 1 billion, Chen said three factors support the two countries developing their trade relationship.

The factors include a strong mandate for a free-trade agreement from Chinese President Hu Jintao after meeting with Clark last October, the fact that New Zealand was the first Western nation to sign the accession agreement for China to join the World Trade Organization (news – web sites) and that New Zealand doesn’t dispute China’s status as a market economy.

-By Stephen Wright, Dow Jones Newswires; 64-4-471-5990; stephen.wright@dowjones.com