The EU and New Zealand have signed their free trade agreement (FTA), providing significant gains for the EU.
Duty Reduction: The deal will cut approximately €140 million in annual duties for EU companies starting from the first year of application.
- All tariffs on EU exports to New Zealand will be eliminated, creating a more favorable environment for trade.
- EU farmers will immediately gain better market opportunities in New Zealand, as tariffs on key EU exports such as pig meat, wine and sparkling wine, chocolate, sugar confectionery, and biscuits will be eliminated.
- Sensitive agricultural products, such as dairy, beef and sheep meat, ethanol, and sweetcorn, will have no liberalization of trade. Instead, limited imports from New Zealand with zero or lower tariffs will be allowed through Tariff Rate Quotas.
Trade Growth: Bilateral trade is expected to grow by up to 30% within a decade as a result of this agreement.
- EU annual exports have the potential to increase by up to €4.5 billion.
- EU investment in New Zealand may experience growth of up to 80%.
The EU-New Zealand FTA will bring forth numerous opportunities for businesses. Here are the key benefits:
- Opening of Services Market: Key sectors such as financial services, telecommunications, maritime transport, and delivery services in New Zealand will be opened for EU businesses.
- Non-Discriminatory Treatment: EU investors in New Zealand and vice versa will receive non-discriminatory treatment, enhancing investment opportunities.
- Improved Access to Government Procurement: EU companies will gain improved access to New Zealand government procurement contracts for goods, services, works, and works concessions.
- Facilitation of Digital Trade: The agreement will facilitate data flows, establish predictable and transparent rules for digital trade, and provide a secure online environment for consumers.
- Data Protection and Localization: Unjustified data localization requirements will be prevented, and high standards of personal data protection will be maintained.
- Support for Small and Medium Enterprises (SMEs): A dedicated chapter on small and medium enterprises will help SMEs export more by reducing compliance requirements and procedures.
- Streamlined Trade Procedures: Compliance requirements and procedures will be significantly reduced, allowing for quicker flow of goods.
- Intellectual Property Rights: New Zealand commits to protect and enforce intellectual property rights, aligned with EU standards.
The EU-New Zealand FTA brings specific benefits to the agri-food sector, as well:
- Protection of Wines and Spirits: The FTA will protect the full list of EU wines and spirits, including renowned products like Prosecco, Polish Vodka, Rioja, Champagne, and Tokaji.
- Geographical Indications (GIs): 163 EU geographical indications, such as Asiago, Feta, Comté cheese, Istarski pr?ut ham, Lübecker Marzipan, and Elia Kalamatas olives, will be protected in New Zealand.
Sustainability Commitments: This landmark agreement includes unprecedented sustainability commitments:
- Trade and Sustainable Development (TSD) Commitments: The agreement includes ambitious TSD commitments covering a wide range of issues, emphasizing cooperation and strengthened enforcement.
- Sustainable Food Systems: For the first time in an EU free trade agreement, a dedicated chapter on sustainable food systems is established.
- Trade and Gender Equality: The FTA includes a specific article on trade and gender equality, recognizing the importance of promoting gender equality in trade.
- Trade and Fossil Fuel Subsidies Reform: The agreement includes a specific provision on trade and fossil fuel subsidies reform, aiming for sustainable and clean energy practices.
- Liberalization of Environmental Goods and Services: Environmental goods and services will be liberalized upon entry into force of the agreement.
- Adherence to the Paris Climate Agreement.
Ratification and Implementation:
- The agreement has been sent to the European Parliament for its consent.
- Following the ratification process in both the EU and New Zealand, the agreement will enter into force.
EU's Trade Approach and Engagement:
- Trade agreements align with the EU's open trade approach, known as the 'partnering' approach.
- This approach is one of the three goals of the European Economic Security Strategy introduced recently.
- The EU's agreement with New Zealand exemplifies increased engagement with the Indo-Pacific region.
- The agreement signifies the EU's commitment to delivering on its Indo-Pacific Strategy and expanding relations with this burgeoning region of the world.
On the same day, the European Commission and New Zealand officially signed the association agreement for New Zealand's participation in Horizon Europe, the EU's research and innovation program. This agreement represents a significant milestone as it is the first association of a non-geographically close partner with the program. It signifies a fresh approach by the EU, strengthening its collaborations with trusted partners that possess a strong scientific foundation and proven research achievements.
