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26 March 2014
New Zealand and EU agree to deepen relations

New Zealand and the European Union (EU) have agreed to take steps to deepen their relationship including through a possible Free Trade Agreement following a meeting in The Hague. 

Prime Minister John Key met with President of the European Commission, Jose Manuel Barroso and President of the European Council, Herman Van Rompuy during the Nuclear Security Summit.

“The EU is our third largest trading partner with over $16 billion in two-way trade of goods and services.  It is also a long-standing close friend and partner.  We share common interests, values and history,” said Mr Key.

“However, we can’t afford to be complacent, especially given the shift in economic gravity to Asia.  We’ve agreed to consider our options for refreshing our trade and economic relationship over the next 12 months.”

For the first time, the EU has agreed to consider a Free Trade Agreement as one such option.

“This is a significant development.  We’ve always said a Free Trade Agreement is the obvious next step.  We’re not there yet, but the issue is now on the agenda – and that’s a step forward.  We’re going to come back to this in 2015 to take decisions on what to do next,” says Mr Key.

“Our relationship is broader than just trade.  We’re also working to conclude a new Partnership Agreement which will provide a blueprint for all aspects of our relationship well into the 21st century.” 

“The EU’s decision to upgrade its diplomatic mission in Wellington is a positive demonstration of its commitment to the relationship.  I look forward to welcoming the EU’s first resident Ambassador in Wellington.” Prime Minister Key says.

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20 March 2014
Prime Minister welcomes cheaper UK-NZ travel

Prime Minister and Tourism Minister John Key, has welcomed the British Government’s decision to reduce duties for passenger flights to New Zealand.

“I have consistently advocated for such a change, which will benefit travelling New Zealanders and encourage more tourists to come to New Zealand.”

Chancellor George Osborne announced in the UK Budget last night the scrapping of the top two bands of air passenger duty, which apply to long-haul flights, to take effect from 1 April 2015.

The changes means duties on flights to New Zealand will be reduced by £26 (NZ$50) per passenger or £104 (NZ$201) for a family of four.

The United Kingdom continues to be an important tourism market for New Zealand, but in recent years, tough economic conditions have depressed growth in tourism numbers, not helped by this levy.

The United Kingdom is currently New Zealand’s fourth largest visitor market in terms of arrivals (191,632 in 2013) and third largest in terms of spend (an estimated $608 million in 2013).

Before the extra air passenger duties were introduced in 2008, the UK was our second largest visitor market by both arrivals and spending.

“People from the UK who are thinking of coming to New Zealand for a holiday will be delighted by this news; as we are,” says John Key.

“It will also be welcomed by our tourism operators in New Zealand who have also lobbied for these duties to be removed.”

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19 March 2014
China and NZ set ambitious new trade goals

Prime Minister John Key and Chinese President Xi Jinping have today set an ambitious new goal for two-way trade of $30 billion by 2020.

In a meeting at the Great Hall of the People in Beijing today they also discussed the success of the Free Trade Agreement between the two countries.

“This relationship has never been stronger,” says Mr Key. “We have great confidence that the coming years will see trade between us increase at a very fast pace.”

This was the Prime Minister’s second meeting with President Xi in China in the last 12 months and their third formal meeting over the same period. The consistency of high level contact reflects the very strong state of the New Zealand-China relationship.

There has been a doubling in the value of two-way goods trade with China since 2008, and a trebling in exports, There has been a doubling in the number of visitor arrivals from China and new airline links.

“To support what we see as the ever increasing importance of the China market and its growth potential, we intend to invest heavily in resourcing the region appropriately”, says Mr Key.

The new resources will include an increase in personnel working on the China relationship, including;

  • MFAT will establish seven new positions to further the political and economic relationship. They will also engage a Public Affairs Manager and Advisor, both in Beijing
  • The Ministry of Primary Industries (MPI) will add nine positions

“We are also in the final stages of approving a further boost involving other government agencies, some of which is subject to the Budget process. I will have more to say about this closer to the Budget. 

“These additions reflect the widespread commitment within New Zealand’s public sector to the New Zealand-China relationship.

“Our new goal of reaching $30 billion in two way trade by 2020 must be supported by people and resources. I am committed to making this happen.”

In the meeting with President Xi Mr Key also said New Zealand was investing in future growth in the relationship by building a new Chancery.

“The current Chancery has served us well since 1973, but it is now time for it to reflect the status and importance of New Zealand’s relationship with China.

“The increased New Zealand footprint in Beijing will mean that the Government will support a greater range of New Zealand activities in China, including in education, science and research and the primary industries,” says Mr Key.

Prime Minister Key and President Xi also discussed new initiatives for increased cooperation in agriculture and food safety, including scholarships.

Prime Minister Key emphasised to President Xi New Zealand’s commitment to providing safe, high quality food to China. 

“The outcomes of the Government Inquiry into the Whey Protein Contamination Incident have confirmed the New Zealand food safety system is of international best standard,” says Mr Key.

Prime Minister Key and President Xi also discussed key priorities and challenges in the regional and international environment.

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19 March 2014
Meeting Premier further strengthens NZ-China links

Prime Minister John Key says agreements entered into with China at his meeting with Premier Li Keqiang highlight the continuing strength of the relationship between our two countries.

Mr Key and Premier Li Keqiang met at the Great Hall of the People. Mr Key’s visit to China marks the third time the countries’ top leaders have met in less than 12 months.

The meeting emphasised the value both countries place on the political, trade and economic relationship which, has continued to grow rapidly.

New Zealand and China are well on track to achieve a shared goal, agreed by the Prime Minister and Premier Wen Jiabao in 2010, to double two-way trade to NZ$20 billion by 2015. Two-way trade is currently worth over $18 billion.

“My meeting highlighted the mutually beneficial nature of the bilateral trade, with China becoming our number one goods export market, and remaining the number one source of imports for New Zealand,” says Mr Key.

The Prime Minister said that he was pleased to see the particularly strong growth in dairy exports to China, which reached nearly NZ$5 billion in 2013, an increase of 75 percent.

“My meeting provided the opportunity to brief Premier Li on the outcomes of the Whey Protein Concentrate Contamination Incident Government Inquiries, emphasising that they underline that New Zealand is a producer of high quality food, with world class regulatory systems,” says Mr Key.

The Prime Minister and Premier Li discussed New Zealand and China’s shared interest in strengthening financial sector cooperation, as well as cooperation in the areas of agriculture and food safety.

Six new initiatives have been agreed at the meeting, including:

  • The launch of direct trading of the New Zealand dollar against the Chinese Renminbi.
  • Agreement to renegotiate the 1986 Double Tax Agreement.
  • Implementation of an electronic equipment Mutual Recognition Agreement that will enable New Zealand to become the first country in the world to test, inspect and certify electrical products outside of China.
  • Enhanced agricultural cooperation in dairy herd improvement, agricultural management, veterinary training scholarships and professional development exchanges.
  • Improved food safety cooperation including the launch of a scholarship programme in food safety and risk management.

“The financial sector offers great potential for further cooperation between New Zealand and China. Today’s announcements will make doing business with China easier by reducing compliance costs and contribute to the wider expansion of the economic and financial cooperation between the two countries,” says Mr Key.

During the meeting Prime Minister John Key also acknowledged the trauma Chinese families are enduring while they await news of their loved ones who were aboard missing Malaysia Airlines flight MH370.

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19 March 2014
China and NZ launch direct currency trading

Prime Minister John Key and China’s Premier, Li Keqiang, today announced the launch of direct trading of the New Zealand dollar against the Chinese renminbi in the Chinese onshore market.

Mr Key is in Beijing on the first day of his official visit to China, and met Premier Li Keqiang at the Great Hall of the People.

“It’s great to have been in Beijing to witness the conclusion of negotiations to launch direct trading of the New Zealand and Chinese currencies, which I kicked off during talks with President Xi on the margins of the Bo’ao Forum in April 2013.

“I am delighted that the project has been brought to a successful conclusion so quickly. It highlights the strong relationship and goodwill between New Zealand and China,” says Mr Key.

Mr Key says this important step will make doing business with China easier by reducing the costs of converting between the two currencies, and will stimulate trade and investment. 

“Direct trading will also increase the integration between the New Zealand and Chinese financial systems, and deepen the economic relationship between the two countries.  During 2013, trade in goods between China and New Zealand was worth $18.2bn, up 25.2% on the previous year.  China is now New Zealand’s top destination for exports of goods,” says Mr Key.

The New Zealand dollar is only the sixth currency to be directly traded with the renminbi. The other currencies are the US dollar, Japanese yen, Australian dollar, Russian rouble and Malaysian ringgit.  Previously, organisations that needed to trade the New Zealand dollar against the renminbi had to do so indirectly with two trades against a third currency, usually the US dollar. 

The Prime Minister says the New Zealand government continues to work with New Zealand banks, other financial institutions, and exporters and importers who trade with China, to raise awareness of the benefits of pricing in the two currencies and how direct trading can help.

“Today’s announcement will further reduce the costs of trade and investment transactions between New Zealand and China, increasing the ease of doing business for the benefit of businesspeople in both countries,” says Mr Key.