Brussels, 27 November 2023 (TDI): The European Council today adopted a decision on the conclusion of a free trade agreement (FTA) between the EU and New Zealand.
This decision clears the path, on the EU side, for the entry into force of the agreement. Once New Zealand also completes its legal requirements and procedures, the agreement can enter into force, probably in early 2024.
The FTA will boost trade and investment, strengthen economic ties, and create opportunities for businesses and consumers on both sides. The EU is New Zealand’s third largest trade partner, with bilateral trade in goods reaching almost €9.1 billion in 2022.
Upon agreement commencement, bilateral trade is expected to increase by approximately 30%. EU exports could expand by up to €4.5 billion annually, while EU investment in New Zealand could grow by 80%. Additionally, duties for EU companies could be reduced by €140 million per year during the first year of implementation.
However, the agreement will eliminate tariffs on EU exports to New Zealand, open up New Zealand’s services market, and ensure fair treatment for investors. Also improves access to government contracts, protects EU wines, spirits, and traditional products, establishes rules for digital trade, and supports SMEs.
The EU-NZ Free Trade Agreement is a significant milestone that embraces the EU’s novel approach to trade and sustainable development. It includes a specialized chapter on sustainable food systems. Although, an article on trade and gender equality, and a provision on reforming trade and fossil fuel subsidies.
Moreover, the agreement promotes the liberalization of green goods and services and establishes sanctions for severe violations of labor principles and the Paris Agreement commitments.
Also Read: EU and New Zealand sign free trade agreement
On 30 June 2022, the EU and New Zealand successfully concluded negotiations for a trade agreement. The agreement officially inked on 9 July 2023. The European Parliament gave consent on 22 November 2023, by the TFEU.
Once New Zealand ratifies the agreement and both parties complete their internal procedures, it will come into effect. The agreement is scheduled to take effect on the first day of the second month after both sides confirm they have met the requirements.