(China Daily)
Updated: 2008-04-08 07:37

The free trade agreement (FTA) China and New Zealand signed yesterday marks not only a significant achievement for the two countries to further grow their trade and economic ties. It also gives a needed boost to free trade when a US-led global slowdown adds to the danger of a resurgence of protectionism.

As the world largest developing economy, China has been actively promoting free trade in recent years. The new deal is the seventh FTAs China has signed with other countries or regions and the first one with a developed economy.

The mutual benefits of the groundbreaking free trade pact are obvious.

Two-way trade between China and New Zealand totalled $5.9 billion in 2007, up 10 percent on the previous year.

As the FTA slashes almost all tariffs to zero on both sides, it is believed that businesses in China and New Zealand will have many more opportunities to tap for the benefit of the two peoples.

The signing of the deal after 15 rounds of detailed negotiations since 2004 also sets a good example for trade talks China is having or will have with other developing and developed nations.

It shows that joint efforts can enable countries to overcome difference in their development levels to strike a practical deal that will both further their cooperative relations and promote each other's economic growth.

More important, successful implementation of these FTAs will deal a huge blow to protectionists who would like to blame China, a rising trade power, for all their domestic economic woes.

As the world's most populous country, China naturally enjoys a huge advantage of low labor costs. However, while the country has registered a ballooning trade surplus with its rise as a global manufacturing power, protectionist pressures against China have increased in a number of developed countries. Such a trend is detrimental to the growth of free trade around the world.

The new FTA is the latest evidence that China has not slowed its pace to integrate itself with the global economy after its entry into the World Trade Organization. Clearly, the recognition by a developed economy as a closer trade partner tells a lot about China's commitment to free trade.

It is hoped that more developed economies will follow the example of New Zealand which is also the first developed country to recognize China's full market economy status.

Closer trade ties that help expanding overseas markets will surely work better than protectionism in accelerating economic growth.

(China Daily 04/08/2008 page8)