Kiwis looking good to undercut Australians

NATIONAL: The signing of New Zealand's historic Free Trade Agreement with China yesterday (April 7) will potentially allow Kiwi woolgrowers to undercut their Australian counterparts.

The agreement means New Zealand triffs on most Chinese imports will reach zero by 2012 or 2013. Those on textiles, apparel, footwear and carpet will be phased out by 2014 or 2016.

Both countries have been working hard to snag more ground in the Asian market in recent years, however under the terms of the agreement, which include a specific quota for wool, New Zealand exporters will be able to sell their wool for less than Aussie woolgrowers yet still make good profits.

At present New Zealand has to join other exporters in bidding for a share of a 287,000 tonne international quota, however under the agreement China promises to take at least 25,000 tonnes (worth $NZ170 million) of NZ's wool exports, increasing that annually over nine years to 37,000 tonnes.

Reports in New Zealand newspapers today, however, are already warning exporters that this advantage may not last long with Australian Prime Minister Kevin Rudd hoping to advance talks of Australia signing its own free trade agreement during his visit to Beijing this week.