Minister for Trade and Export Growth, Damien O’Connor, says a significant milestone in ratifying the NZ-EU Free Trade Agreement (FTA) was reached last night, with 524 of the 705 member European Parliament voting in favour to approve the agreement.
“I’m delighted to hear of the successful vote to approve the NZ-EU FTA in the European Parliament overnight. This is an important step towards the agreement entering into force,” said Minister O’Connor.
The vote result is the largest majority in favour of any EU trade agreement since 2011.
“The broad support for the agreement from across the European Parliament demonstrates the value of this deal to both parties. The FTA will provide a boost to the already strong trade and investment links between New Zealand and Europe.
“New Zealand is also working at pace to ratify the agreement, so that our exporters can take advantage of its benefits as soon as possible. This could see the agreement entering into force as early as the first half of 2024,” he said.
Benefits of the deal include:
- Providing an annual boost to our GDP of up to $1.4 billion, and increase our exports to the EU by up to $1.8 billion per year by 2035;
- Duties removed on 91% of New Zealand’s goods exports to the EU from entry into force, rising to 97% after seven years;
- Tariff savings of $100 million per annum on New Zealand exports to the EU from Day One – the highest immediate tariff savings of any New Zealand FTA. This includes the removal of tariffs on products like kiwifruit, mānuka honey, fish and seafood, onions, wine and industrial products;
- Significant new quota access for beef, sheep meat, butter and cheese – worth hundreds of millions of dollars per year, if filled.
Following the approval vote by the European Parliament, there are still some administrative steps required to complete the EU’s ratification process, including adoption of the approval vote by the Council of the EU and the passage of implementing regulations.
New Zealand needs to pass implementing legislation in order to ratify the agreement. Draft legislation has been prepared and, once a new government is in place, this will go to Cabinet to approve its introduction to Parliament, Mr O’Connor confirmed.
Once both Parties have completed ratification, they will notify each other and agree on a date for the agreement to enter into force.
The EU is New Zealand’s fourth-largest trade partner, with two-way goods and services trade worth NZ$20.2 billion in 2022, accounting for 10.3% of New Zealand’s total trade in goods and services.