The EU and New Zealand have today (Sunday, July 9) signed their free trade agreement (FTA) which aims to increase bilateral trade by 30% within a decade.
The deal will cut some €140 million a year in duties for EU companies sending goods to New Zealand from the first year of the agreement coming into force.
Brussels estimates that annual EU exports could grow by up to €4.5 billion, while EU investment into New Zealand has the potential to increase by up to 80%.
The landmark agreement also includes sustainability commitments, including respect of the Paris Climate Agreement and core labour rights.
Trade agreement
According to the EU, the deal creates new opportunities for European farmers and food producers, while taking into account the interests of EU producers of sensitive agricultural products such as several dairy products, beef and sheep meat, ethanol and sweetcorn.
For these sectors, there will be no liberalisation of trade. Instead, the agreement will allow zero or lower tariff imports from New Zealand in limited amounts, through so-called Tariff Rate Quotas.
Under the agreement 10,000t of high quality grass-fed beef, from New Zealand will be imported with a reduced duty of 7.5%.
The EU will also allow a tariff rate quota of 38,000t of sheep meat to be imported duty free.
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 high-protein 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 trade agreement will see tariffs eliminated on EU exports of pig meat, cheeses, wine and sparkling wine, chocolate, sugar confectionary and biscuits.
The trade agreement will protect EU products with geographical indications (GIs) and a list of EU wines and spirits.
EU Commission
Commenting on the signing of the deal, Ursula von der Leyen, EU Commission president, said: “This modern free trade agreement brings major opportunities for our companies, our farmers and our consumers, on both sides.
“With unprecedented social and climate commitments, it drives just and green growth while reinforcing Europe’s economic security,” she said.
The agreement will now be sent to the European Parliament for its consent. Following the completion of the ratification process in both the EU and New Zealand, the deal enters into force.
Negotiations for an FTA between the EU and New Zealand started in June 2018.
12 negotiating rounds took place up to March 2022, followed by discussions leading up to the conclusion of the negotiations on June 30 2022, when the deal was announced.