The European Union and New Zealand have signed a free trade agreement (FTA) which is expected to boost trade by 30 per cent and cut duties by €140 million from the first year of application.
Negotiations on the agreement took place between June 2018 and June 2022.
Thanks to the agreement, annual EU exports are expected to potentially grow up to €4.5 billion, and investment by the bloc into New Zealand has the potential to grow by up to 80 per cent.
The agreement also includes sustainability commitments, including respect to the Paris Climate Agreement and core labour rights.
President European Commission, Ursula von der Leyen, said, “This modern free trade agreement brings major opportunities for our companies, our farmers, and our consumers, on both sides. With unprecedented social and climate commitments, it drives just and green growth while reinforcing Europe’s economic security.”
The FTA will eliminate all tariffs on EU exports to New Zealand, open the country’s services market in key sectors such as financial services, telecommunications, maritime transport, and delivery services and ensure non-discriminatory treatment to EU investors in New Zealand and vice versa.
It will also help small businesses export more through a dedicated chapter on small and medium enterprises, significantly reducing compliance requirements and procedures to allow for quicker flow of goods and facilitating data flows, predictable and transparent rules for digital trade and secure online environment for consumers.
The bloc’s farmers will also benefit from tariffs being eliminated on key EU exports such as pig meat, wine, and other products.
It will also consider interests of EU producers of sensitive agricultural products such as a range of dairy products, beef, and sheep meat among others. For sensitive products tariffs will be cut or reduced for limited quantities.
Malta has already developed a positive trade balance with New Zealand, with exports of goods and services having steadily grown from 1.57 million NZD (€0.89 million) in Q2 2014 to 55.1 million NZD (€31.12 million) in Q1 2023.
Exports from Malta to New Zealand primarily concern personal, cultural, and recreational services, followed by pharmaceuticals and optical, medical, and measuring equipment.
Meanwhile, imports to Malta from New Zealand primarily concern meat, pharmaceuticals, and made-up textile articles.
The FTA is sent to the European Parliament for a vote. Once it is approved, the Council of the EU will adopt the decision, and once New Zealand notifies that it has also ratified it, the agreement enters into force.
Featured Image: EU Commission President Ursula Von Der Leyen and New Zealand MP Chris Hipkins
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