The European Commission and New Zealand announced, on 30 June, that they had concluded their negotiations for a free trade agreement. It implements the Commission’s new strategy for taking greater account of sustainable development in trade. Last week, the Commission presented new guidelines on the subject (see EUROPE 12977/18).
The two partners provide for sanctions to be applied as a last resort in the event of serious violations of the Paris Agreement or the core conventions of the International Labour Organization (ILO). Until now, trade and sustainable development chapters in trade agreements were subject to a dispute settlement system, which did not provide for sanctions as a last resort.
The agreement also provides that so-called “green” products and services, such as renewable energy or energy-efficient products, will not be subject to any tariffs once the agreement enters into force. The exact text of the agreement had not yet been published at the time of going to press.
The EU Commissioner for Trade, Valdis Dombrovskis, said he was pleased that the negotiations had moved quickly on sustainable development issues, as opposed to those concerning the liberalisation of trade in agri-food products. “The discussions on agri-food products were the most difficult, a delicate balance had to be found” he said. New Zealand’s beef and dairy exports to the EU were particularly sensitive areas. For New Zealand’s Trade Minister Damien O'Connor, the conclusion of the negotiations shows that this balance has been struck.
Liberalisation of agri-food products
The compromise reached between the EU and New Zealand is that imports from New Zealand of beef and sheep meat; milk powders; butter; cheese; whey; maize; and ethanol will be subject to tariff quotas and reduced or eliminated duties. These will be phased in over a seven-year period.
For example, Wellington will be able to export up to 10,000 tonnes of beef at a reduced tariff of 7.5% to the EU. However, this only applies to high quality beef exports. Sheep meat and cheese will be allowed to be exported to the EU without tariffs, but also up to a certain volume (38,000 tonnes for sheep and 25,000 tonnes for cheese).
According to one EU source, this is more than enough to protect European producers, as EU beef consumption reaches 8 million tonnes per year. Beef imports from New Zealand at reduced tariffs therefore only account for around 0.1% of European consumption.
Several categories of European agri-food products exported to New Zealand will not be subject to any tariffs from the entry into force of the agreement. This includes pork, wine and sugar. “We expect that EU exports to New Zealand, can increase by up to €4.5 billion euro per year. Removal of tariffs should save EU businesses around €140 million in duties per year”, said Valdis Dombrovskis.
The agreement also provides for the protection of around 200 European geographical indications in New Zealand on wines and spirits, and around 150 on food products.
Enhanced cooperation on digital
The two partners also agreed to include “ambitious rules”, on data protection, according to Mr Dombrovskis. The aim is to regulate the flow of data, to have predictable and transparent rules for digital trade, but also to prevent unjustified location requirements for consumers.
Welcoming the conclusion of the agreement
Several Members of the European Parliament welcomed the announcement of the conclusion of the negotiations. The Chair of the European Parliament’s Committee on International Trade (INTA), Bernd Lange (S&D, Germany), called it a “good day” for trade: “ the symbolic value of this agreement should not be underestimated, especially in the current geopolitical context”, he added.
For several months, many voices in the Parliament and among the Member States have been calling on the EU to speed up the conclusion of trade agreements (see EUROPE 12976/14).
However, others are concerned about the impact of the agreement on European producers. EUROPE will come back on the various reactions to the free trade agreement as well as some of the details of the text. (Original version in French by Léa Marchal)