The Council of the EU has given the final sign off on a free trade deal with New Zealand.
The council adopted a decision today (Monday, November 27) on the conclusion of the free trade agreement between the EU and New Zealand.
The EU has now taken all steps that clear the way for the agreement to enter into force.
Once New Zealand completes its legal requirements and procedures, the agreement can enter into force, probably in 2024.
The council’s adoption of a decision follows on from the European Parliament taking a similar decision last week, which, on Wednesday (November 22), voted to approve the free trade agreement.
The council said that the free trade agreement will liberalise and facilitate trade and investment, as well as promote a closer economic relationship and open “significant” economic opportunities for companies and consumers on both sides.
The EU is New Zealand’s third biggest trade partner. Bilateral trade in goods between the two has risen steadily in recent years, reaching almost €9.1 billion in 2022.
Once the agreement enters into force, bilateral trade is expected to grow by up to 30%, with EU annual exports potentially growing by up to €4.5 billion.
EU investment into New Zealand has the potential to grow by up to 80%. The deal can cut some €140 million a year in duties for EU companies in the first year of application.
Among other changes, the agreement will eliminate all tariffs on a range of EU exports to New Zealand, including pigmeat, and protect a range of EU-produced foods with geographical indication status.
To protect some sensitive EU agricultural sectors, tariff rate quotas will apply to New Zealand products such as sheepmeat, beef, butter, cheese, and milk powder imports.
10,000t of beef from New Zealand will be imported with a reduced duty of 7.5%. A tariff rate quota of 38,000t of duty-free sheepmeat imports will also be allowed.
The agreement will see 15,000t of milk powders imported with a 20% duty rate, along with 25,000t of cheese and 3,500t of whey imported duty free.
The duty on over 35,000t of butter imports will also be reduced. These volumes will be gradually phased in over seven years from when the agreement enters into force.
The free trade agreement is the first agreement to fully integrate the EU’s new approach to trade and sustainable development, which was endorsed by the council on October 17.
It includes a dedicated sustainable food systems chapter, and a dedicated provision on trade and fossil fuel subsidies reform.
The deal also liberalises green goods and services at entry into force. In cases of serious violations of “core labour principles” or of the Paris climate agreement, the FTA foresees sanctions as a last resort, the council said.
Once the agreement has been ratified by New Zealand, and the two sides notify each other about the completion of their internal procedures, it can enter into force.
The entry into force will take place on the first day of the second month after both sides confirm they have completed legal requirements and procedures, or on another date agreed by the parties.