China: all but wheat, sugar and rice

Wheat, sugar and rice, along with “certain paper products” those are the items that will remain subject to tarrifs when we export them to China. They represent about 4% of our exports to China, so not a bad outcome.

All three grains are subject to some pretty serious subsidization and quota-driven distortions in the world markets, and we are not serious contenders in the field. So forget about it – let the USA and Europe carry on paying their farmers billions to grow uneconomic wheat and protect from cane sugar imports. This does deprive the developing world of huge export markets for their otherwise competitive farm proucts, but that is a different war.

Overall I’m impressed with the deal – pretty straightforward lowering of barriers and some cultural exchange (working holidays and the like) built in. No horrilbe DCMA copyright provisions, no distorting pseudo free trade – this is pretty close to a good as it gets, though dairy products will take until 2017-2019 and wool is subject to a quota.

Well done to both China and NZ’s negotiators.

The rules of origin seem to be pretty fair – a lot of “change to heading xxx from any other chapter”, by product, which I interpret as meaning that  if a country makes a product from sub product parts that came from elsewhere then it is still duty free.

But what of the human rights, I hear squealing from the left?

Well, another way to look at that question is to ask a similar question: do we believe that the USA should remove their distorting sugar quotas (that keep Cuba’s producers down), trade embargo and travel barriers to Cuba?

Of course they should – engagement is the best way to help another country move forward, and by being open with China we are able to help them welcome them to the world.

And besides – do we really think we, the last decent sized habitable land discovered by humans, can tell a 6000 year old civilisation, land of 1.3 billion, how to behave?

I think not – we punch above our weight, but they are in another game entirely

About Lance Wiggs

@lancewiggs
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