The Free Trade Agreement signed with the European Union will deliver significant outcomes for selected sectors, but falls short of the high quality Agreement New Zealand signed with the UK, Export NZ says.
“The EU FTA will increase our exports to the EU by up to $1.8 billion per year by 2035,” Prime Minister Chris Hipkins says.
“Tariff savings on New Zealand exports are $100 million from day one of the agreement entering into force, the highest immediate tariff saving delivered by any New Zealand FTA. That’s around three times the immediate savings from the UK FTA.”
Minister for Trade and Export Growth Damien O’Connor said the NZ-EU FTA will cut costs and support exporters to grow and diversify their trade.
“It will provide significant new opportunities for our world-leading exporters of products such as kiwifruit, seafood, onions, honey, wine, butter, cheese, beef and sheep meat. This new access will help to accelerate our post-COVIDrecovery, while providing a boost to our regions as they grapple with the longer-term effects of Cyclone Gabrielle,” O’Connor says.
The FTA contains another important ‘EU first’ that New Zealand worked hard to secure – a MÄori Trade and Economic Cooperation chapter that will create a platform for greater engagement with the EU on Māori economic and trade interests.
The agreement was signed in Brussels by Minister for Trade and Export Growth, Damien O’Connor and the EU Executive Vice President and Trade Commissioner Valdis Dombrovskis, witnessed by Prime Minister Chris Hipkins and EU President Ursula von der Leyen.
Executive director Josh Tan says the FTA opens up a market for goods previously obstructed by tariffs on products exported from New Zealand.
“The winning sectors on the day are the likes of horticulture, seafood, wine, and honey – who will be delighted with the outcomes. Our two largest goods export sectors, red meat and diary however would have been hoping for more commercially meaningful outcomes for their exports,” says Josh.
“Unfortunately the EU has not backed its own farmers to be competitive with meat and dairy farmers in New Zealand and maintained tariff protection for them. This is not only to the detriment of NZ exporters from our meat and dairy sectors, but it means that EU consumers will be paying more for our high quality sustainably produced food.
“On the bright side, our service exporters can now compete in the EU market on a more-level playing field alongside local offerings and others in market like the UK and Singapore.”
Josh says negotiating with as many countries and interests within the European Union can be difficult without compromise.
“While we could not call this FTA comprehensive, ExportNZ acknowledges the hard work New Zealand’s negotiators put in to secure this deal.
“We expect the FTA will come into force by this time next year and look forward to the seeing our exports continue to grow in the EU market.”
It is anticipated that the NZ-EU FTA will enter into force in the first half of 2024, once both parties complete the final required legal steps.
