12 October 2013

Australians Miss Out on China Free Trade Agreement

New Zealand and China have a free trade agreement (FTA). For most items of clothing imported from China to New Zealand, the current duty rate is 6.3%, reducing to 4.2% in January 2014, 2.1% in 2015 and zero in 2016. However, if those items are imported from a third country – even if made in China – then the duty rate that applies is 10%.

This affects mainly Australian retailers with stores in this country, who source their goods from China for both countries and then sort them for distribution in their Australian DC. Chinese garments shipped from Melbourne to Auckland end up paying a duty of 10%, losing the benefit of the FTA preferential rates. The only solution to this problem is to have the New Zealand requirements shipped here direct from China.

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