China FTA and the Environment

China's poor environmental record has been widely reported by environmental NGOs, the World Bank, the OECD, and the UNDP, among others. The issues include air pollution (the OECD estimate that by 2020 air pollution will lead to 600,000 premature deaths annually in Chinese cities), water pollution and water scarcity (the OECD estimate that 300 million rural residents already lack access to safe drinking water and the Council of Foreign Relations estimate that 75 percent of river water flowing through urban areas is unsafe for drinking or fishing), land desertification (the Council of Foreign Relations estimate that 5,800 square miles of grass land are lost each year), and greenhouse gas emissions (China is now the world's biggest CO2 emitter).

The Green Party believes that trade agreements must include provisions that uphold environmental standards. This is because environmental standards and trade are not independent – businesses that do not need to conform to environmental standards will have a competitive advantage over businesses that do. In this sense, environmental standards are a non-tariff barrier to trade.

Without provisions to protect the environment, free trade agreements may create a perverse incentive for businesses to shift operations between trading partners to the country which has the lowest environmental standards – a so called 'race to the bottom'. Free trade agreements may also limit an individual trading partner's ability to impose 'sustainability' conditions on products that they import as these measures may be seen as 'protectionist'.

The New Zealand – China Free Trade Agreement fails to include any binding environmental standards for sustainable production. Environmental issues are addressed by the entirely voluntary 'Environmental Cooperation Agreement' that accompanies the FTA. This agreement states that countries set their 'own policies and national priorities' and 'administer and enforce their own environmental laws and regulations'. This is essentially turning a blind eye to China's current environmental record.