Brussels, 1 July 2022 (TDI): After a four-year negotiation process, and more than 10 rounds of negotiations, New Zealand and the European Union (EU) conclude talks for a Free Trade Agreement (FTA).
Ursula Von Der Leyen, President of the European Commission, which oversees trade policy, saluted the achievement through a post on her official Linkedin profile.
Bilateral Relations between the EU and New Zealand: An Overview
Official diplomatic relations started in 1942 when the United Kingdom (UK) acknowledged New Zealand’s autonomy within the British Empire.
The EU and New Zealand share multiple interests and values. Both are committed to organizations such as the United Nations (UN), and the World Trade Organization (WTO).
Lately, they have been working jointly on numerous international issues. These matters include development in the Pacific, scientific cooperation, and climate change.
In fact, the European Union is New Zealand’s most important partner in terms of developing renewable energies in the Pacific.
For instance, in 2016 both parties signed a Partnership Agreement for Relations and Cooperation. The partnership aimed to boost cooperation in issues such as economy and trade, science, and education.
The European Union is one of the world’s biggest trade entities. Hence, the importance of strengthening trade relationships with it for New Zealand.
New Zealand’s main goods exports to the EU include meat, food, beverages, and seafood. Furthermore, New Zealand’s main service exports to the EU include tourism and transportation.
On the other hand, the European Union’s main exports to New Zealand include mechanical machinery, pharmaceuticals, and vehicles. The EU’s main service exports to New Zealand are also tourism and transportation.
The FTA: An insight
Negotiations for an FTA started in 2018. The first 7 rounds of negotiations were held in person both in Wellington and in Brussels. From 2020 onwards, the remaining rounds were held virtually.
During that time, a sustainability impact assessment was done to support the FTA negotiations. The assessment proved that the FTA would have beneficial macro-economic results for both parties.
The agreement will bring multiple benefits to businesses. In the case of New Zealand businesses, new opportunities to grow, invest, and broaden into European markets will be available.
The accord includes innovations related to green growth. It also includes key points related to reducing fossil fuel subsidies.
Most importantly, it will remove numerous existing tariffs on goods and safeguard the environment thanks to ambitious provisions for sustainable development.
Consequently, companies will be able to compete on a level playing field both in New Zealand and in the EU, respectively.
The FTA negotiations have concluded. It will enter into force after the European Parliament and the 27 EU governments approve it. The process could take around 20 months.
The New Zealand Ministry of Foreign Affairs & Trade also shared its contentment with the new FTA through its official Twitter account:
The NZ-EU Free Trade Agreement means new opportunities for export growth and investment, for Māori exporters & businesses large and small, plus strong commitments on environment and climate change, labour standards, gender equality & more 🇳🇿🤝🇪🇺#NZEUFTA #NZCloseToEU #tradeforall pic.twitter.com/twzGHPCEsk
— New Zealand Ministry of Foreign Affairs & Trade (@MFATNZ) June 30, 2022
It is expected that this new FTA will bring multiple benefits to the EU and New Zealand. According to estimates, trade between both parties will grow by 30% thanks to the agreement.