The NZ-China FTA aims to reduce barriers to trade in services. This will help New Zealand companies conduct business in China.
Services cover areas such as tourism, education, construction and transport.
Examples of barriers to trade in services include:
- Different rules or requirements for foreign companies compared to Chinese companies that are designed to give local companies a competitive advantage.
- Requirements for foreign companies to employ a certain percentage of locals or to enter into a joint venture with a local company.
The services chapter in the NZ-China FTA does not cover trade in services being purchased by the New Zealand or Chinese Government, though the two countries may negotiate an agreement relating to government procurement in the future; or services supplied 'in the exercise of governmental authority'. These are services supplied neither on a commercial basis nor in competition with one or more service supplier.
New Zealand and China have also agreed to ensure that their domestic measures affecting the trade in services are administered in a reasonable, objective and impartial manner.
The four modes of service supply
The trade in services includes services supplied using any of the following four modes:
Mode 1: Cross-border Trade
The service is supplied by a provider physically located in one country, to a customer in another country (for example, over the internet).
Mode 2: Consumption abroad
A customer of one country travels to another country to consume a service (for example, a student travels abroad to study).
Mode 3: Commercial presence
A foreign service supplier establishes a legal presence in another country to provide a service (for example, a company opens an office or enters into a joint venture in another country).
Mode 4: Movement of Natural Persons
A person of one country travels temporarily to another country in order to supply a service directly.
- Page last updated: 16 July 2010