NEW ZEALAND: The New Zealand-China Free Trade Agreement (FTA) has come into force, which will see New Zealand gain a competitive advantage in one of the world’s largest markets.

China is New Zealand’s third largest trading partner and Trade Minister Phil Goff said there has been a “hugely positive response” from New Zealand’s business community to what the FTA offers.

Under the agreement, 35 percent of New Zealand’s exports to China will be tariff-free, and this will extend to two thirds of exports within five years.

The government says that by 2019, 96 percent of New Zealand’s exports to China will have no tariffs.

“The estimated benefit to New Zealand of a free trade agreement is a growth in exports against baselines of between $225 million and $350 million a year and a reduction in tariff payments worth $115 million,” Goff said in a government statement.

Goff said exports of goods to China is currently worth about $2 billion a year, and China is New Zealand’s largest source of international students and fourth largest source of tourists.

However, he warned that while the business opportunities are impressive, “there is a need for companies to be fully prepared to work within conditions that differ greatly from our own and to understand China’s business culture”.

Over the past four months New Zealand Trade and Enterprise has been running road shows on the FTA and is planning to run another series of workshops from November.

For more information about the NZ-China FTA see www.chinafta.govt.nz.