As its free-trade deal with New Zealand is set to enter force on Thursday, Beijing has announced a late change – the immediate slashing of tariffs on a some types of wood and paper products from the Pacific Island nation. The move comes as prices of forest goods, including pulp and corrugated paper, have been rising amid supply-chain disruptions and the Ukraine war . China will reduce or remove duties on 12 wood and paper product lines as part of the new agreement with Wellington, according to a statement on Sunday by the tariff commission of the State Council, the country’s cabinet. Most notably, the commission said it will directly cut import tariffs – to zero from 7.5 per cent – on three specific items in a faster manner than gradually doing so over the next decade, which had been previously announced last year. Those products comprise medium-density fibreboard; a type of self-adhesive paper; and paper or paperboard labels. New Zealand to lower barriers to Chinese investment under upgraded trade deal Tariffs on the other nine product lines – which will drop by 0.5 or 0.7 percentage points – will gradually decrease to zero by 2031, according to the revised agreement. Given the existing tariff cut in the current agreement that took effect in 2008, this means that 99 per cent of New Zealand’s nearly US$4 billion worth of annual wood and paper shipments to China will be granted duty-free access to the world’s second-largest economy. The updated trade deal also comes as 2022 marks the 50th anniversary of the establishment of diplomatic relations between China and New Zealand. “Carrying out the agreed tariff rates will further promote trade and investment exchanges between the two countries; enhance the interests of companies and the well-being of the two people; and push the economic and trade relations between the two countries to a higher level,” the tariff commission said on Sunday. In the last 10 days of March, the price of pulp rose by 14 per cent from a year prior, according to the Post ’s calculations based on data released by the National Bureau of Statistics on Monday. “The price of wood-pulp market fluctuates greatly, and [China’s] import dependence of wood chips is high. If the price of raw materials fluctuates sharply in the future, it will affect the production cost of paper enterprises,” analysts with Dongguang Securities said on Sunday. The 2008 free-trade agreement with New Zealand was the first such pact between China and a developed country. China and New Zealand are also members of the Regional Comprehensive Economic Partnership (RCEP) free-trade agreement with the 10 Association of Southeast Asian Nations (Asean) members plus Australia, Japan and South Korea, which largely went into effect at the start of the year. World’s largest free trade deal is under way, but what is RCEP? “The upgraded agreement also marks an improvement in the quality and efficiency of China-New Zealand free-trade relations on the basis of the world’s largest free-trade agreement, RCEP, which entered into force in January,” the Jiangsu sub-council of the China Council for the Promotion of International Trade said on Saturday. Beijing and Wellington confirmed in February that the expansion to the agreement would enter into force this week, after completing negotiations in January last year. China and Australia abandoned an opportunity make similar changes to their free-trade deal in December 2020 amid growing tensions. New Zealand’s China-bound exports of the 12 types of wood and paper products rose by 8 per cent to 20,737 tonnes in last year – more than four times the 4,436 tonnes that came from Australia, but still dwarfed by 153,893 tonnes from the United States, according to Chinese customs data. China is now New Zealand’s largest trading partner. Two-way trade, including exports and imports of goods and services, has more than quintupled from US$4.4 billion in 2008 to over US$24.7 billion in 2021, following their initial free-trade pact.