The European Union (EU) and New Zealand have officially signed their free trade agreement (FTA), marking a significant milestone in their economic partnership. The FTA is expected to bring substantial benefits to the EU, with an estimated €140 million reduction in duties for EU companies in the first year alone. Bilateral trade between the EU and New Zealand is projected to increase by up to 30% within a decade, potentially resulting in EU annual exports growing by up to €4.5 billion. Moreover, EU investment in New Zealand could potentially increase by up to 80%.
This landmark agreement includes unprecedented sustainability commitments, ensuring compliance with the Paris Climate Agreement and core labor rights. The deal now awaits the consent of the European Parliament and the completion of the ratification process in both the EU and New Zealand before it enters into force.
The FTA aligns with the EU’s open trade approach and demonstrates the EU’s commitment to deepening engagement with the Indo-Pacific region, as outlined in its Indo-Pacific Strategy. Ursula von der Leyen, President of the European Commission, emphasized the importance of New Zealand as a key partner in the region and highlighted the opportunities that the agreement will bring for companies, farmers, and consumers on both sides. She also praised the sustainability commitments within the agreement, promoting just and green growth while reinforcing Europe’s economic security.
The EU-New Zealand FTA will provide new export opportunities for businesses by eliminating tariffs on EU exports to New Zealand, opening up the New Zealand services market in sectors such as financial services and telecommunications, and improving access to government procurement contracts. The agreement also includes provisions to facilitate data flows, promote digital trade, and protect intellectual property rights.
In the agricultural sector, EU farmers will benefit from improved access to the New Zealand market, with tariffs eliminated on key exports such as pig meat, wine, chocolate, sugar confectionery, and biscuits. Additionally, the FTA will protect the names of close to 2,000 EU wines and spirits, as well as 163 renowned European Geographical Indications such as Asiago cheese, Feta, and Champagne.
The EU-New Zealand FTA sets new standards for sustainability commitments in a trade agreement, integrating the EU’s approach to trade and sustainable development. It includes dedicated chapters on sustainable food systems, trade and gender equality, and trade and fossil fuel subsidies reform. The agreement also promotes liberalization of environmental goods and services.
The FTA will now undergo the consent process in the European Parliament. Once consent is granted and both the EU and New Zealand complete their ratification procedures, the agreement will enter into force.
Background: Negotiations for the EU-New Zealand FTA began in June 2018 and concluded in June 2022. The agreement aims to strengthen economic ties and foster green and just economic growth between the EU and New Zealand.
https://ec.europa.eu/commission/presscorner/detail/en/IP_23_3715