The Chinese market

The World Trade Organization (WTO) successfully negotiated the ascension of China to the WTO in 1991. The WTO is an international trade and rule organization that regulates trade between nations. The function of the WTO is to lower trade barriers, usually in the form tariffs or import duties, to lower the cost of importing goods in the interest of trade facilitation.

China signed a separate trade agreement with the United States in 1999. This agreement lowered the average tariff on U.S. agricultural goods going to China to around 14.5 percent while setting the average tariff for Chinese agricultural goods moving to the U.S. at 17 percent.

New Zealand jumped onto the bandwagon of signing Free Trade Agreements with foreign governments in the mid 2000s during the prime ministerialship of Helen Clarke. Was this a mistake..probably not.  But what was the terms of the Free Trade Agreement (FTA)...elimination of duties on most items traded between the two countries, free movement of people between the two countries to encourage trade and etc (without going into the details).  Unfortunately, I must say that like most leaders, Helen Clarke was too quick to sign the FTA.  Like most New Zealand politicians (former and current included), Helen Clarke and Phill Goff was too quick to finalise this agreement without actually looking at the repecussions of it.  New Zealand became the first western country to clinch a free trade agreement with China. Pursuant to the FTA, New Zealand will remove all tariffs on Chinese imports by 2016.

The United Sates of America and many other bigcountries are now paying for the trade agreements they have entered into with China.  These countries are flooded with dirt cheap Chinese made products and it is crippling the economy of these countries.  It is the same now in New Zealand too.  What made things worse is that these products from China do not meet the standards and to a certain extent hazourdous to health.  In 2007, a number of hazardous products shipped to the United States from China were recalled and banned. Investigations found chemicals in pet food and toothpaste, lead paint in children's toys and banned antibiotics in farmed seafood.

What I do not understand is that leaders of these countries(including NZ) never took time to progress the trade issues with China on a periodic basis.  The WTO was responsible to opening the Chinese market but it has not taken the right steps to ensure that China was safe to trade with in all angles.  Before signing the agreement, the international community should have ensured that China complied with all international trade ethics and requirements.  As soon as the US jumped into the bandwagaon, all other countries wanted to tap into the Chinese market and hence all sorts of bilateral trade agreements were established, including the FTA.

New Zealand has to be very cautious dealing with China. New Zealand politicians seem to favour engaging in various trade agreements with China.  John Key is one them.  However before embarking on such actions, instead of thinking what you could get of China, have they thought what China can get from NZ ?  Have they thought what the long term repercussions will be for New Zealand?

It is all good to sign all sorts of trade agreements with China and open the market to both countries.  It looks very nice on the outset, politically and economically.  However,  we have to understand the culture of those countries we are dealing with, because, at the end of the day we are actually dealing with the people.  Chinese have shown to trade anything in the sun to make money at any expense.  This is not the kind of business partners we want to deal with.  As I see it, by engaging in business with China, we are actually being an accomplice to the many corrupt practices of China.  China and Rusia are one of the major suppliers of weapons to the underdeveloped countries which are engaged in civil wars, in exchange for those countries' mineral reserves.

The chance of one's product being copied and sold in the world market is extremely high if one was to relocate his/her/their factory to China.  This is daylight robbery!!!  China is also manipulating their currency to maintain its dirt cheap price, to continue to monopolise the world market. Very unethical indeed, no fair play at all.

The NZ-China FTA reaffirms New Zealand and China's commitment on intellectual rights under the TRIPS (Trade-related aspects of intellectual property rights) agreement and other multilateral agreements.
The parties have agreed to cooperate on eliminating trade in products infringing intellectual property rights, subject to the laws of each party.  A consultation mechanism is in place which allows New Zealand to request consultations to seek a timely and mutually satisfactory solution on any intellectual property issue within the scope of the FTA.  But having this in place is not going to be of any good to NZ or any other government which has this protection in place if they do not invoke this clause.

In my opinion, politicians generally are so eager to put their name on the history book as the person who has increased the gross domestic product of the country and (to a certain extent, but not all) to increase their bank accounts for their retirement.  Once a person is in politics all sorts of personal business deals are open for their picking.  These business deals can sometimes cloud their beliefs and judgement.  So, politicians whether right-wing or left-wing should be cautious in promoting any sort of trade or business deals with a country.  I believe that we need a strong independent trade commission to evaluate trade deals with foreign governments.