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Benefits and Drawbacks of NZ-China Free Trade Agreements

   

Added on  2019-11-26

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Running head: International Business 1International BusinessESSAY 2
Benefits and Drawbacks of NZ-China Free Trade Agreements_1

International Business 2IntroductionThe Free Trade Agreements is basically a system under which there is free flow of the labours, capital and goods from one nation to another without any kind of barricade that can hinder and restrain trading process between two different countries. To have effective exports to China, the Government of New Zealand has pursued and negotiated “Free Trade Agreements” with Asian countries and it has offered several benefits to the country while exporting its products to China (Kelsey, 2015). The paper will present several benefits as well as drawbacks of these “Free Trade Agreements” between China and New Zealand. Benefits and drawbacks of the free trade agreements between New Zealand and ChinaChina is one of the largest nation destinations for the exports of New Zealand and so there were imposed huge duty payments on yearly basis. Since the time FTA i.e. Free Trade Agreement came into force, there was elimination of the tariffs which were imposed on the exports to China from a huge percentage and with the complete implementation of such agreements there will be realized upsurge and high amount of duty saving on the trade practices (Bano, 2014). The FTA made it obligatory that all the products trading must met the relevant ROO i.e. Rules of Origin criteria for qualifying for the favoured tariff treatment. This helps in prevention of the goods from various other sources from acquiring the benefits of the FTA by participating through the back door (Lookafterme, 2015). The ROO helps in facilitating trade and minimizing the cost of compliance for the exporters. It has several benefits such as enabling the manufactures to use materials in the international supply chain as well as can have modifications in the process of manufacturing. With the FTA, New Zealand access the competence to undertake the remedy actions against any kind of unfair trade practices while trading with China. It is consistent with the obligations and rights of WTO so that no unfair practices can take place against the producersof New Zealand (Petri, Plummer and Zhai, 2014). The other benefits of the Free Trade Agreements comprises of competence to take the international safeguard action, offers a framework for increased level of cooperation on the purpose of phytosanitary and sanitary measures, improves transparency, helps in bringing certainty and predictability in the bilateral investment and trade associations and facilitates expansion of trade in goods and services among China and New Zealand (Mfat, 2016).
Benefits and Drawbacks of NZ-China Free Trade Agreements_2

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