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EU-NEW ZEALAND FREE TRADE AGREEMENT

In “A Stronger Europe in the World”

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Background and state of play

The Commission presented the draft negotiating directives in September 2017. In May 2018, the Council authorised the Commission to negotiate a free trade agreement (FTA) with New Zealand, and adopted the related negotiating directives. According to this mandate, the 'Agreement should exclusively contain provisions on trade and foreign direct investment related areas'. The EU is committed to taking European agricultural sensitivities fully into consideration during the negotiations. Therefore, although the mandate declared that the agreement should 'ensure the highest possible degree of trade liberalisation', it also stated that the most sensitive products should be covered by specific provisions. 

On 21 June 2018, negotiations were officially launched in New Zealand.

In 2016, the Commission undertook a public consultation on the future EU-Australia and EU-New Zealand trade and economic relations. It received 108 answers, with those who responded representing industry associations, private companies and citizens. The majority of business sector stakeholders welcomed the FTA. The notable exceptions were business stakeholders of some EU agricultural sub-sectors, who did not support the full liberalisation of specific products. The non-profit stakeholders emphasised the need to maintain high levels of standards for the social, environmental, consumer and other areas, and to safeguard the governments' right to regulate.

A Sustainability Impact Assessment (SIA) Draft Final Report carried out for the Commission was published on 13 December 2019. The SIA analyses the potential economic, social, human rights and environmental impacts of the agreement.

On 30 June 2022, Commission President Von der Leyen and New Zealand Prime Minister Ardern announced the conclusion of negotiations in Brussels. The agreement would eliminate 100% of remaining New Zealand tariffs on EU exports of goods at entry into force, while 94% of EU tariff lines on New Zealand exports would be eliminated from entry into force.

From the beginning, the most sensitive issue was trade in agricultural products such as meat and dairy, where New Zealand is highly competitive internationally. New Zealand sought to achieve 'commercially meaningful' access to the EU market for its agricultural exports, whereas the EU was reluctant to grant far-reaching liberalisation in this area. In addition, the EU sought to protect European geographical indications (GIs) in the New Zealand market. The agreement as negotiated would expand tariff rate quotas for New Zealand meat and dairy exports, while protecting thousands of EU GIs in New Zealand (and a smaller number of New Zealand GIs in the EU). The agreement would also be the EU's first to include sanctionable commitments to the Paris Agreement and to core International Labour Organization standards.

Twelve negotiating rounds were held between July 2018 and March 2022, before a political agreement was announced on 30 June 2022. Negotiations have, in most cases, been conducted on the basis of the EU textual proposals. 

The twelfth round was held by videoconference in March 2022. The chief negotiators committed to continuing to work intersessionally, until a conclusion was announced in June 2022. The negotiated draft texts will go through legal revision, and be translated. Following that, the agreement must be adopted by the Council (the Commission sent it in February 2023), after which the EU and New Zealand will sign it. Following its signature, the text is transmitted to the European Parliament. Once the European Parliament has given its consent, and once the agreement has been ratified by New Zealand, it can then enter into force.

Position of the European Parliament

In October 2017, Parliament adopted a resoultion on the negotiating mandate for EU trade negotiations with New Zealand. In it Parliament requests that a clear distinction be made between an agreement on trade and foreign direct investment liberalisation, dealing with issues under EU-only competences, and a potential second agreement which covers subjects whose competences are shared with Member States. In addition to enumerating areas to be included in the future FTA, the protection of the most sensitive sectors through, for instance, the introduction of appropriate quotas or transition periods, and of IPR through GIs, were also recommended.

As is mentioned above, once the EP has given its consent, and once the agreement has been ratified by New Zealand, it can then enter into force. Parliament approved the text on 22 November 2023. On 27 November, the Council adopted a decision on the conclusion of the FTA. Once New Zealand also completes its legal requirements and procedures, the agreement can enter into force, probably in early 2024.

References:

Further reading:

Author: Angelos Delivorias, Members' Research Service, legislative-train@europarl.europa.eu

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As of 15/12/2024.