What has New Zealand gained from The FTA with China?: Two counterfactual analyses^†

Abstract

New Zealand (NZ) was the first developed country to have signed a free trade agreement (FTA) with China. We investigate the effects of the 2008 NZ-China FTA on (i) exports from NZ to China, and (ii) real GDP per capita in NZ using the synthetic control method that focuses on estimating the counterfactual outcomes. We find that NZ exports to China were more than 200% higher in 2013 and 2014 than what they would have been if NZ had never signed the FTA with China. Even though the NZ export sector experienced gains from the 2008 FTA, this agreement did not have any observable impact on real GDP per capita of NZ.