Fonterra applauds progress toward China-NZ FTA

Fonterra applauds Government's progress towards China-New Zealand FTA

Fonterra has welcomed the achievement of the New Zealand Government in making rapid progress towards establishing a free trade agreement with China.

Chairman Henry van der Heyden said Fonterra was a strong supporter of a comprehensive FTA with China and applauded the efforts of the Government in bedding down a trade and economic framework in a relatively short timeframe.

"A free trade agreement will underpin Fonterra's partnership approach to the Chinese dairy industry and ensure improved access to the world's most dynamic and fastest growing economy," he said.

Prime Minister Helen Clark and Trade Minister Jim Sutton announced details of the Government's progress today, including the finalisation of a Trade and Economic Framework after only four months of discussions and the launch of a joint FTA feasibility study. It is expected that negotiations on a comprehensive FTA will get underway early next year.

Mr van der Heyden said Fonterra is keen to work with the New Zealand Government on the feasibility project.

China is now Fonterra's fourth largest export market by value, generating in excess of NZ$300 million last season. The bulk of Fonterra's sales are generated from the supply of ingredients to companies manufacturing dairy products. A number of Fonterra's consumer brands such as Anchor, Chesdale and Anlene are sold in China as well. Fonterra formally opened a new office in Shanghai on 29 March 2004, the new head office of New Zealand Milk in China.

China's consumption of dairy products and demand for ingredients is continuing to grow as a result of increased urbanisation, rising incomes and growing consumer sophistication, backed by support of the State Commission for Food and Nutrition in China. All indications suggest that consumer and ingredients demand will continue to increase beyond the capacity of the local dairy industry to supply, creating market opportunities for Fonterra.

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