Saturday, September 30, 2023

The EU and New Zealand sign a free trade agreement

The European Union (EU) and New Zealand Today they signed a free trade agreement with which they aspire to increase their commercial exchanges by 30% thanks to the elimination of tariffs on exports and the greater opening of their service markets.

“It’s an agreement free trade very ambitious and very balanced. I think it provides a lot of opportunities for our respective companies,” European Commission President Ursula von der Leyen said at a press conference with New Zealand Prime Minister Chris Hipkins ahead of the signing in Brussels.

The agreement, concluded in 2022 after four years of negotiations, will eliminate all duty to exports from the EU to New Zealand, which consist mainly of manufactured goods, while the community block it will remove them for the vast majority of New Zealand exports, especially agricultural products.

Bilateral trade in goods between the two amounted to €9.1 billion in 2022 and that of services to €3.5 billion in 2021, while EU investments in New Zealand reached €9.3 billion and those of this country in the Twenty-seven €4.3 billion, according to the latest figures published by el Community Executive.

Brussels hopes that with this agreement EU exports to New Zealand can increase by up to €4.5 billion per year, European investments grow by 80%, and the companies of the bloc save 140 million euros per year, according to the vice-president of the Commission responsible for Trade, Valdis Dombrovskis.

Once it is ratified by both parties and enters into force, the agreement will also entail the opening of the New Zealand service market for European firms in sectors such as financial services, telecommunications or maritime transport, and an improvement in their access to the country’s public tenders market, valued at around €60 billion a year.

For its part, New Zealand estimates that the agreement with which it is now its third trading partner will allow it to increase its exports to the EU in $1.8 billion per year (€1,640 million), as explained by the New Zealand Minister of Commerce, Damien O’Connor, at a press conference.

In the agri-food chapter, sensitive for the EU given the strength of New Zealand, in addition to the elimination of all tariffs on European exports, the agreement protects all wines and spirits and other products with designation of origin, such as Rioja wine or Manchego cheese.

Likewise, for some products that concerned Europeans, such as dairy, beef and sheepa, ethanol or corn, the volume of New Zealand imports that can benefit from the reduction of tariffs will be limited.

On the other hand, the agreement includes for the first time commitments regarding sustainability and demands compliance with the Paris Agreement for the Climate, even foreseeing sanctions if it is not respected, in line with the new approach adopted by the EU to promote sustainability also through its commercial relations.

“There are pioneering results on climate change and the Paris Agreement and important commitments in other areas, including labor rightsgender equality or subsidies harmful to the environment”, highlighted the New Zealand Prime Minister, who emphasized the “shared commitment” of both parties to human rights, global security or the international system based on rules.

This cooperation also includes the agreement, also signed today, for New Zealand to participate in the Horizon Europe community research and innovation programme, which will mobilize some €100,000 million over seven years, as well as the pact for the country to cooperate with Europol, in force from today.

“These agreements bring the EU and New Zealand even closer. Despite being a world away, we have a lot in common,” said von der Leyen, who thanked New Zealand for aligning with the European sanctions Russia and its support for Ukraine despite being at the antipodes.

“From the Russian war in Ukraine to rising tensions in the Indo-Pacific region, the geopolitical environment is increasingly changing and uncertain. All the more reason for like-minded partners to strengthen our ties to address different risks,” she added.


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