EU-New Zealand: Council adopts the decision to sign free trade agreement
On 27 June, the Council adopted a decision on the signature of the free trade agreement (FTA) with New Zealand.
The EU and New Zealand are expected to sign the agreement later on.
EU-New Zealand free trade agreement
The FTA will liberalise and facilitate trade and investment, as well as promote a closer economic relationship, which will open significant economic opportunities for companies and consumers on both sides.
The EU is New Zealand’s third-biggest trade partner. Bilateral trade in goods between the two partners has risen steadily in recent years, reaching almost €9,1bn in 2022.
Once the agreement enters into force, bilateral trade is expected to grow by up to 30% thanks to this deal, with EU annual exports potentially growing by up to €4.5 billion. EU investment into New Zealand has a potential to grow by up to 80%. The deal can cut some €140 million a year in duties for EU companies from the first year of application.
In the current geopolitical context, after COVID-19 and Russia’s aggression against Ukraine, this new agreement with a like-minded partner as New Zealand is of key importance for the EU and the EU’s Indo-Pacific strategy. The FTA represents major opportunities for our companies, our farmers and our consumers, as well as for the New Zealand counterparts. It also includes unprecedented social and climate commitments.
Johan Forssell, Swedish Minister for International Development Cooperation and Foreign Trade
The agreement, once in place, will:
- eliminate all tariffs on key EU exports to New Zealand such as pigmeat, wine and sparkling wine, chocolate, sugar confectionary and biscuits
- open New Zealand’s services market in key sectors such as financial services, telecommunications, maritime transport and delivery services
- ensure non-discriminatory treatment to EU investors in New Zealand and vice versa
- improve access for EU companies to New Zealand government procurement contracts for goods, services, works and works concessions
- protect close to 2000 EU wines and spirits such as Prosecco, Polish Vodka, Rioja, Champagne and Tokaji
- protect 163 of the most renowned traditional EU products (Geographical Indications), such as Asiago, Feta, Comté or Queso Manchego cheeses, Istarski pršut ham, Lübecker Marzipan or Elia Kalamatas olives
- facilitate data flows, predictable and transparent rules for digital trade and a secure online environment for consumers
- prevent unjustified data localisation requirements and maintaining the high standards of personal data protection
- help small businesses export more through a dedicated chapter on small and medium enterprises
- reduce compliance requirement and procedures to allow for quicker flow of goods
- protect and enforce intellectual property rights, aligned with EU standards, according to commitments by New Zealand
New generation bilateral agreements
The EU-NZ Free Trade Agreement is the first one to fully integrate the EU’s new approach to trade and sustainable development (TSD) which has been endorsed by the Council in the conclusions of 17 October 2022.
It includes a dedicated sustainable food systems chapter, a dedicated trade and gender equality article and a dedicated provision on trade and fossil fuel subsidies reform.
The deal also liberalises green goods and services at entry into force.
In case of serious violations of core labour principles or of the Paris Agreement, the FTA foresees sanctions as a last resort.
Background and next steps
The European Union concluded negotiations for a comprehensive and ambitious trade agreement with New Zealand on 30 June 2022. On 17 February 2023, the Commission proposed to the Council to authorise the signing of the FTA.
After the signing takes place, the Council will request the European Parliament to give its consent to the conclusion of the Agreement (as stipulated in the TFEU).
Once the European Parliament has given its consent, the agreement has been ratified by New Zealand, and the two sides notify each other about the completion of their internal procedures, it can then enter into force.
The entry into force will take place on the first day of the second month after both sides confirm having completed legal requirements and procedures or on another date agreed by the parties.