EU and New Zealand conclude negotiations for a bilateral free-trade agreement

On June 30, 2022, after 4 years of talks, the EU and New Zealand concluded the negotiations for a landmark bilateral trade agreement.  

Current trade relations

Until the entry into force of the bilateral free-trade agreement, trade relations between the EU and New Zealand will continue to be governed by WTO rules. Trade in goods reached almost EUR8 bln in 2021, while trade in services reached EUR3.7 bln in 2020. In spite of the distance, the EU was the third largest trading partner of New Zealand. Bilateral investment stocks exceeded EUR13 bln.

Assessed overall benefits of the agreement

Bilateral trade is expected to grow by up to 30% thanks to this deal, with EU annual exports potentially growing by up to EUR4.5 billion. EU investment into New Zealand has a potential to grow by up to 80%. The deal can cut some EUR140 million a year in duties for EU companies from the first year of application.

Some key features of the agreement

• At its entry into force, the agreement will remove duties on all industrial goods from the EU exported to New Zealand. The agreement will also eliminate or substantially reduce EU duties on most New Zealand goods exported to the EU.
• The agreement permits the imposition of trade defence measures. It also includes a bilateral safeguard mechanism, which allows the EU and New Zealand to impose temporary measures in case a significant increase of preferential imports causes, or threatens to cause, serious injury to their domestic industries.
• The agreement will make it easier for EU firms to provide services to New Zealand and open opportunities to invest in both services and manufacturing sectors. It will ensure a level playing field between EU service providers and their competitors in New Zealand.
• The EU and New Zealand will reciprocally open up their procurement markets beyond what is already covered under the WTO Government Procurement Agreement (GPA).

A close look to agri-food trade

From an offensive point of view, customs duties on imports of key products from the EU such as pork meat, wine and chocolate will be eliminated from the entry into force of the agreement. A large number of EU geographical indications will be protected in New Zealand. On the defensive front, the opening of the EU market to New Zealand products such as beef and sheep meat and dairy products will be “controlled” through tariff rate quotas (TRQs).     

What is new in the agreement?

For the first time ever in an EU trade agreement, the deal has a dedicated sustainable food systems chapter, a dedicated trade and gender equality article and a dedicated provision on trade and fossil fuel subsidies reform. The deal also liberalises green goods and services at entry into force.

For more information on this agreement, please see the web portal of the European Commission available here: https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/new-zealand/eu-new-zealand-agreement_en