The European Union and New Zealand signed a free trade agreement this Sunday, July 9, which should lead to a 30% increase in their bilateral trade within a decade. Commenting on this agreement concluded in June 2022 after four years of tough negotiations, the President of the European Commission Ursula von der Leyen welcomed an “ambitious” and “very balanced” text.
“New Zealand is a key partner for us in the Indo-Pacific region, and this free trade agreement will bring us even closer,” she added in a statement from Brussels. New Zealand Prime Minister Chris Hipkins praised a text that represents “huge benefits” for both partners.
The European Union is New Zealand’s third largest trading partner, exporting wine, fruit and meat to Europe, among others. Bilateral trade in goods between the two areas represented just over 9 billion euros in 2022. According to Brussels, EU exports to the Pacific archipelago could increase to the amount of 4.5 billion euros per year. European investment in New Zealand could also see an increase of up to 80%. In addition, “the agreement can reduce customs duties for EU companies by some 140 million euros per year from the first year of application”, specifies the Commission’s website European.
A green shutter
The text also contains a chapter dedicated to “sustainable development”, unprecedented in a European trade agreement. In particular, it allows the parties “to apply sanctions as a last resort in the event of a serious violation of the fundamental principles of labor or of the Paris agreement”. “For the first time ever in an EU trade agreement, the EU-New Zealand agreement includes a chapter dedicated to sustainable food systems, an article on trade and gender equality women, as well as a specific provision concerning trade and the reform of fossil fuel subsidies”, lists the European Commission, also promising that the latter “will liberalize trade in environmental goods and services as soon as it comes into force”.
Trade opening is one of the four pillars of the European Green Deal industrial plan announced by the Commission President on 1 February. “With unprecedented social and climate commitments, this agreement promotes fair and green growth while strengthening Europe’s economic security,” said Ursula von der Leyen on Sunday. To enter into force, it will still have to receive the approval of the European Parliament – which should examine it by the end of 2023 – and be ratified by New Zealand.
Unfair competition ?
Several federations of French breeders, such as the National Sheep Federation nevertheless criticize Brussels for not having obtained from New Zealand the prohibition of certain pesticides in their breeding pastures, whereas they are prohibited in Europe. They are therefore worried about unfair competition if meat imported from New Zealand turns out to be cheaper than that produced in France due to less demanding social and environmental standards.
In the pages of the world dated July 1, French Foreign Trade Minister Franck Riester, reacted cautiously. He promised to examine the agreement before its presentation to the Council of the EU “so as to verify that our interests have indeed been taken into account”, while welcoming “the inclusion of the Paris agreement as an essential element ” and the existence of “protections for our sensitive agricultural sectors” in the text.