The EU and New Zealand have today concluded negotiations for a Trade Agreement, which is set to open significant economic opportunities for companies and consumers on both sides. The deal also includes unprecedented sustainability commitments, including respect of the Paris Climate Agreement and core labour rights, which are enforceable through trade sanctions as a last resort.
Bilateral trade is expected to grow by up to 30% thanks to this deal, with EU annual exports potentially growing by up to €4.5 billion. EU investment into New Zealand has a potential to grow by up to 80%. The deal can cut some €140 million a year in duties for EU companies from the first year of application.
European Commission President, Ursula von der Leyen, said: “New Zealand is a key partner for us in the Indo-Pacific region. This trade agreement brings major opportunities for our companies, our farmers and our consumers, on both sides. It can help increase trade between us by 30%. It includes unprecedented social and climate commitments. This new agreement between the European Union and New Zealand comes at an important geopolitical moment. Democracies – like ours – work together and deliver for people.”
Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, said: “This is a new generation of trade deal, with both sides set to make real economic and environmental gains. New economic opportunities are vital as we strive to recover from the twin shocks of COVID-19 and Russia’s aggression against Ukraine. This deal will unlock a raft of fresh export opportunities for EU businesses and SMEs for goods and services. It also contains the most ambitious sustainability commitments in any trade agreement ever. This proves we are already delivering on our promise to get more added value from our trade deals in terms of sustainability.”
New export opportunities for businesses big and small
The agreement will provide new opportunities for businesses by:
Eliminating all tariffs on EU exports to New Zealand.
Opening the New Zealand services market in key sectors such as financial services, telecommunications, maritime transport and delivery services.
Ensuring non-discriminatory treatment to EU investors in New Zealand and vice versa.
Improving access for EU companies to New Zealand government procurement contracts for goods, services, works and works concessions. The New Zealand procurement market is worth some €60 billion a year.
Facilitating data flows, predictable and transparent rules for digital trade and a secure online environment for consumers.
Preventing unjustified data localisation requirements and maintaining the high standards of personal data protection.
Helping small businesses export more through a dedicated chapter on small and medium enterprises.
Significantly reducing compliance requirement and procedures to allow for quicker flow of goods.
Significant commitments by New Zealand to protect and enforce intellectual property rights, aligned with EU standards.
Agri-food: stimulating EU exports while shielding EU sensitivities
EU farmers will have much better opportunities to sell their produce in New Zealand immediately upon application of the agreement. Tariffs will be eliminated as of day one on key EU exports such as pigmeat, wine and sparkling wine, chocolate, sugar confectionary and biscuits.
EU farmers will see benefits beyond the tariff cuts. The Agreement will protect the full list of EU wines and spirits (close to 2000 names) such as Prosecco, Polish Vodka, Rioja, Champagne and Tokaji. In addition, 163 of the most renowned traditional EU products (Geographical Indications), such as Asiago, Feta, Comté or Queso Manchego cheeses, Istarski pršut ham, Lübecker Marzipan, Elia Kalamatas olives will be protected in New Zealand.
The agreement takes into account the interests of EU producers of sensitive agricultural products: several dairy products, beef and sheep meat, ethanol and sweetcorn. For these sectors, the agreement will allow zero or lower tariff imports from New Zealand only in limited amounts (through so-called Tariff Rate Quotas).
The most ambitious sustainability commitments in a trade agreement ever
The EU-NZ Trade Agreement is the first one to integrate the EU’s new approach to trade and sustainable development announced in the Communication “The power of trade partnerships: together for green and just economic growth”, adopted just last week.
Both sides agreed to ambitious TSD commitments covering a wide range of issues based on cooperation and strengthened enforcement, including the possibility of sanctions as a last resort in case of serious violations of core labour principles or of the Paris Agreement. Respect for the Paris agreement will also be an essential element of this agreement.
For the first time ever in an EU trade agreement, the deal has a dedicated sustainable food systems chapter, a dedicated trade and gender equality article and a dedicated provision on trade and fossil fuel subsidies reform. The deal also liberalises green goods and services at entry into force.
This is in line with recommendations received from citizens coming out of the Conference on the Future of Europe, to promote sustainable trade while opening up new opportunities for European companies.
Next steps
The negotiated draft texts will be published shortly. These texts will go through legal revision (‘legal scrubbing’) and will be translated into all official EU languages. Following that, the European Commission will submit the agreement for signature and conclusion to the Council. Once adopted by the Council, the EU and New Zealand can sign the agreement. Following the signature, the text will be transmitted to the European Parliament for consent. After the consent by the Parliament, and once New Zealand also ratifies it, the agreement can enter into force.
Background
Negotiations for a Free Trade Agreement with New Zealand started in June 2018. The 12th negotiating round was held in March 2022, followed by intersessional discussions leading up to the conclusion of the negotiations on 30 June 2022.
Source: Cyprus News Agency