FATs encourage close trade ties
The free trade agreement (FAT), signed by China and New Zealand, signifies not only a great achievement for the two countries to promote their trade and economic ties. It also boosts free trade under the danger of a resurgence of protectionism.
China has been actively promoting free trade in recent years as the largest developing country in the world. The new agreement is the seventh FTAs China has signed with other countries and the first one with a developed country.
The mutual benefits are obvious with the signing of the free trade. The amount of two-way trade between China and New Zealand reached 5.9 billion in 2007, rose by 10 percent to the previous year.
As there is almost no tariff on both sides, it is believed that businesses in China and New Zealand will get more opportunities for seeking the benefit of the two people. The signing of the deal also sets a good example for trade talks China is having or will have with other developing and developed countries.
It shows that joint efforts can help countries overcome differences in their development levels and further their cooperative relations as well as economic growth. More importantly, successful implementation of these FTAs will blow heavily to protectionism.
As the most populous country in the world, China enjoys a huge advantage of low labour costs. However, protectionism pressures against China have been increased in many developed countries as the country has registered a ballooning trade surplus with its rise as a global manufacturing power. Such a trend is harmful to the growth of free trade around the world.
The new FTA certifies evidently that China has not slowed its pace to integrate itself with the global economy after entering into WTO. Obviously, being recognized by a developed country as a closer trade partner shows the determination of China to free trade.
Hopefully more developed countries will follow the example of New Zealand, and recognize China’s full market economy status. In one word, closer trade ties will definitely work better in accelerating economic growth than protectionism.
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