Eu New Zealand Agreement

The EU-New Zealand Agreement: What It Means for Trade and Economy

In July 2019, the European Union (EU) and New Zealand launched negotiations for a comprehensive free trade agreement (FTA). After six rounds of talks, the two sides reached a political agreement in principle in October 2020. The EU-New Zealand FTA marks a significant milestone in the economic relations between the two partners, as it aims to enhance trade liberalization and cooperation in various sectors.

What are the key benefits of the EU-New Zealand FTA?

First and foremost, the EU-New Zealand FTA will eliminate tariffs on nearly all goods traded between the two sides. This means that exporters from both the EU and New Zealand will save millions of euros in duties and fees, making their products more competitive in each other`s markets. The FTA also includes provisions on customs and trade facilitation, which will simplify and streamline procedures for businesses and reduce costs.

In addition to goods, the FTA covers services, including financial, telecommunications, and transport services. This will create new opportunities for companies in these sectors to access each other`s markets and attract foreign investment. The FTA also includes provisions on intellectual property rights, such as patents, trademarks, and copyrights, which will protect EU and New Zealand companies from piracy and counterfeiting.

Another key benefit of the EU-New Zealand FTA is its focus on sustainability and environmental protection. The FTA includes a dedicated chapter on trade and sustainable development, which aims to ensure that economic growth and trade do not harm the environment, workers` rights, or social welfare. This includes commitments to reduce greenhouse gas emissions, promote renewable energy, and strengthen labor and environmental standards.

What are the challenges and opportunities for the EU and New Zealand?

The EU and New Zealand share many common values and interests, such as democracy, human rights, and multilateralism. However, they also face some challenges in their bilateral relationship, such as geographical distance, asymmetry in trade and investment flows, and differences in regulatory standards. The EU is New Zealand`s third-largest trading partner and a major source of foreign direct investment, while New Zealand ranks only 49th in the EU`s trade rankings.

The EU-New Zealand FTA will help to rebalance this asymmetry and deepen the economic integration between the two partners. However, it also poses some risks and opportunities for their respective industries and consumers. For example, New Zealand`s dairy sector, which is a major exporter to the EU, may face increased competition from EU suppliers, while EU farmers may benefit from increased access to New Zealand`s meat and wine markets.

Overall, the EU-New Zealand FTA is a positive development for trade and economy, as it strengthens the rules-based international trading system, promotes sustainable and inclusive growth, and fosters cooperation between two like-minded partners. The two sides are now working on finalizing the legal text of the agreement and conducting legal review and translation. Once the agreement is signed and ratified, it will enter into force and open up new opportunities and challenges for EU and New Zealand businesses and consumers.