New Zealand and the European Union have overnight signed a ground-breaking Free Trade Agreement that is set to provide significant new trade access to Aotearoa’s fourth-largest trading partner.
“The EU FTA will increase our exports to the EU by up to $1.8 billion per year by 2035,” said Prime Minister, Chris Hipkins.
Tariff savings on New Zealand exports are $100 million from day one of the agreement entering into force, the highest immediate tariff saving delivered by any New Zealand FTA.
“That’s around three times the immediate savings from the UK FTA,” said Mr Hipkins.
“When I became Prime Minister I said securing trade deals for our exporters would be a top priority. Between this and the UK FTA we will save around $150 million annually in tariffs on our exports as well as adding billions every year to New Zealand’s GDP.”
Minister for Trade and Export Growth, Damien O’Connor said the NZ-EU FTA will cut costs and support exporters to grow and diversify their trade.
“It will provide significant new opportunities for our world-leading exporters of products such as kiwifruit, seafood, onions, honey, wine, butter, cheese, beef and sheep meat. This new access will help to accelerate our post-Covid recovery, while providing a boost to our regions as they grapple with the longer-term effects of Cyclone Gabrielle,” Mr O’Connor said.
“Based on current trade figures New Zealand will have the opportunity through combined FTA and WTO quotas to provide up to 60% of the EU’s butter imports – up from 14% today. New Zealand cheeses could also make up 15% of the EU’s imported cheeses, up from 0.5% today, which is no mean feat for a small nation like ours.
“The FTA also builds on our already sizeable WTO quota for sheep meat, meaning that if farmers use this new access, we could account for up to 96% of EU imports. This provides further trade resilience for our exporters, while expanding by eight-fold our access for beef.
“New Zealand producers are some of the most sustainable in the world and these credentials resonate well with EU consumers. New Zealand and the EU share similar values and a commitment to high labour, environment and animal welfare standards.
“The NZ-EU FTA includes ambitious sustainable trade outcomes in a range of areas, including climate change, labour rights, women’s economic empowerment, environmentally harmful fisheries and fossil fuel subsidies.
“We’ve got to keep on our path to lower emissions if we want high quality trade deals that benefit our economy,” the Minister said.
The FTA contains another important ‘EU first’ for New Zealand – a Māori Trade and Economic Cooperation chapter that it’s hoped will create a platform for greater engagement with the EU on Māori economic and trade interests.
The agreement was signed in Brussels by Minister O’Connor and the EU Executive Vice President and Trade Commissioner, Valdis Dombrovskis, witnessed by Prime Minister, Chris Hipkins and EU President, Ursula von der Leyen.
It is anticipated that the NZ-EU FTA will enter into force in the first half of 2024, once both parties complete the final required legal steps.
For more information on the NZ-EU FTA go to www.mfat.govt.nz/eufta