OConnor – Dombrovskis – Photo © European Union 2023
(BRUSSELS) – The EU and New Zealand signed a free trade agreement Monday, expected to cut some EUR 140 million a year in duties for EU companies from the first year of application.
As a result, bilateral trade is expected to grow by up to 30% within a decade, thanks to this deal, with EU annual exports potentially growing by up to 4.5 billion. EU investment into New Zealand has a potential to grow by up to 80%. This landmark agreement also includes unprecedented sustainability commitments, including respect of the Paris Climate Agreement and core labour rights.
The agreement is now 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.
Trade agreements are part of the EU’s open trade or ‘partnering’ – approach, which is one of the three goals of the European Economic Security Strategy presented last month. This agreement with New Zealand also demonstrates how the EU is stepping up engagement with this burgeoning region of the world, delivering on its Indo-Pacific Strategy.
The EU-New Zealand FTA will provide new opportunities for businesses by:
- eliminating all tariffs on EU exports to New Zealand;
- opening the New Zealand services market in key sectors such as financial services, telecommunications, maritime transport and delivery services;
- ensuring non-discriminatory treatment to EU investors in New Zealand and vice versa;
- improving access for EU companies to New Zealand government procurement contracts for goods, services, works and works concessions;
- facilitating data flows, predictable and transparent rules for digital trade and secure online environment for consumers;
- preventing unjustified data localisation requirements and maintaining high standards of personal data protection;
- helping small businesses export more through a dedicated chapter on small and medium enterprises;
- significantly reducing compliance requirements and procedures to allow for quicker flow of goods;
- significant commitments by New Zealand to protect and enforce intellectual property rights, aligned with EU standards.
EU farmers will have much better opportunities to sell their produce in New Zealand immediately upon application of the agreement. Tariffs will be eliminated as of day one on key EU exports such as pig meat, wine and sparkling wine, chocolate, sugar confectionary and biscuits.
EU farmers are expected to see benefits beyond the tariff cuts. The FTA will protect the full list of EU wines and spirits (close to 2,000 names) such as Prosecco, Polish Vodka, Rioja, Champagne and Tokaji. In addition, 163 of the most renowned traditional EU products (Geographical Indications), such as Asiago, Feta, Comté or Queso Manchego cheeses, Istarski prut ham, Lübecker Marzipan, Elia Kalamatas olives will be protected in New Zealand.
The agreement takes into account the interests of EU producers of sensitive agricultural products: 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 only in limited amounts (through so-called Tariff Rate Quotas).
The EU-New Zealand FTA is the first one to integrate the EU’s new approach to trade and sustainable development announced in the Communication
For the first time ever in an EU free trade agreement, the deal has a dedicated sustainable food systems chapter, a dedicated trade and gender equality article and a specific provision on trade and fossil fuel subsidies reform. The deal also liberalises environmental goods and services at entry into force.
Factsheet EU-NZ FTA – Trade and Sustainable Development
