Closer Trade Ties Work Better than Protectionism
While a US-led global slowdown gives rise to the danger of a resurgence of protectionism, the FTA signed between China and New Zealand, which enables the two countries to further grow their trade and economic ties, gives a necessary boost to free trade.
The potential benefits of the pact for both countries are evident.
Above all, as the FTA slashes almost all tariffs to zero on both sides, businesses in China and New Zealand will be presented with many more opportunities to tap into each other’s markets and seek benefits for the two peoples.
Secondly, the 15 rounds of detailed negotiations since 2004 set a good example for trade talks China is having or will have with other developing and developed nations. They help to demonstrate that joint efforts can dilute differences in development levels and make it possible for countries to strike a practical deal from which both countries and peoples stand to benefit.
Finally and more importantly, successful implementation of the pact will deal a heavy blow to protectionists who, due to their domestic economic troubles, tend to blame China. Enjoying the competitive edge of cheap labor, China rises as a global manufacturing powerhouse with a ballooning trade surplus. As a result, protectionist pressures against China have grown in some developed countries, which are detrimental to global free trade. The new FTA and the recognition by a developed country as a closer trade partner prove that China has not hesitated in integrating itself with the global economy after its accession to the WTO and has remained committed to free trade.
As is anticipated that more developed economies will follow New Zealand’s example, closer trade ties that facilitate the expansion of overseas markets will certainly worker better than protectionism in speeding up economic growth.
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