NZ/EU FTA opens door for clean, green economic opportunities

OPINION: Confirmation Aotearoa and the European Union (EU) have successfully negotiated a free trade agreement is welcome news in the current economic environment.

The European Commissioner for Trade, Valdis Dombrovskis, says this is a new generation of trade deals, “with both sides set to make real economic and environmental gains”.

Two-way trade between New Zealand and the EU is worth NZ$17.5 billion annually.

European machinery and equipment – even seeds – found on virtually every farm in the region can be imported cheaper under this agreement.

The Bay of Plenty sees our core exports of kiwifruit and honey as big winners. The tariffs saved on these two products alone exceed $50 million annually.

Kaimoana is another product to gain better access and will benefit quickly.

Zespri has played a crucial role in pushing for removing tariffs on kiwifruit entering the EU market. This was the payoff for an effective and clever long-term strategy.

Zespri has built a European base and has a strong reputation with its Italian and French growers – improving returns. This has allowed them to have a global supply of products.

To secure the deal, the EU wanted to see shared commitment and values rather than a mercantilist grab for market share at the expense of their local agricultural producers.

Trade agreements only happen when all sides see the deal will be better than the status quo. Having European producers in the camp looking for kiwifruit to succeed has bought on-side official support.

New Zealand negotiators were able to secure the protection of the term ‘manuka (mānuka) honey’ – meaning it now only applies to New Zealand-produced mānuka honey. While our marketers will mitigate restrictions on using the term ‘feta’– manuka /mānuka has a significance that goes beyond the production method.

The real value in the agreement is better recognition of our systems of regulation and government. From the perspective of paperwork and compliance, it is easier for our goods and services to be sold in the EU market.

Aotearoa has now locked in a strategic advantage as the EU’s best and greenest trading partner. From the European perspective, the deal is being sold to their voters as providing economic opportunities and “unprecedented sustainability commitments”.

  • Tim Hurdle is Chair of the Bay of Connections Leadership Group and a former adviser to the European Commission and the New Zealand government on trade policy issues.