BIZCHINA> Review & Analysis
Handled with tact, FTAs can do what WTO can't
By Qiao Xinsheng (China Daily)
Updated: 2008-04-18 10:35

On some other occasions, the two countries could reach agreements about trade ties, like free trade in goods or services, which could serve as a base point to transform the arrangements into full and formal FTAs in the future.

Besides, the FTA negotiations are usually founded upon geopolitical relationships, which rely heavily upon mutual trusts between the two countries.

The FTA reached by China and New Zealand is a fruit of practical, flexible and friendly negotiations. Thanks to a mature geopolitical relationship and supplementary economic structures to each other, China and New Zealand have been able to sign the agreement in a relatively short period.

New Zealand was the first country that signed a bilateral agreement with China about China's entry into the World Trade Organization. And it was the first developed country that recognized China's full market economy status.

The fact that New Zealand has signed the FTA with China as the first developed country suggests the importance that New Zealand attaches to its trade with China. And it has also displayed a positive approach in helping China integrate into the global economy as early as possible.

China should try its best to strengthen ties with its trade partners by reaching pacts like FTA, especially with developed countries.

However, trade negotiations are often subject to political changes. There have been precedents in which China paid a dear price to win an equal position with other trading powers. One has only to recall what happened during the negotiations for its WTO membership.

If China wants to establish more free trade zones with other countries, the Chinese negotiators should stick to several principles.

One of the most important targets for an FTA is to lower trade barriers or to eliminate trade restrictions between two countries.

Bearing that in mind, the negotiators should consider trade ties in all sectors as a whole. Not only should they fix the pact terms according to current trade volume and structure, but also consider the sectors that have remarkable potential to increase their trade volume in the future. The country's upcoming trade restructure should also be kept in mind.


(For more biz stories, please visit Industries)