New Zealand wins $1.8b trade deal with EU at eleventh hour & More Trending News

After 4 years of typically torturous negotiations, New Zealand and the European Union have agreed a free trade deal.

Prime Minister Jacinda Ardern, who helped conclude negotiations in Brussels stated it could assist develop exports to the European Union by $1.8 billion a yr by 2035.

Ardern had performed down hopes of a deal earlier this week, saying she was “very willing to come away from Europe without final conclusion” if it didn’t supply vital market entry.

But round noon Brussels time with remaining talks concluded by New Zealand’s chief negotiator Vangelis Vitalis and trade minister Damien O’Connor simply hours earlier than Ardern was scheduled to go away Brussels for London.

“Despite many challenges, we got there, and today we deliver an agreement that represents improved trade opportunities for our exporters,” Ardern stated, as she introduced the deal with European Commission President Ursula von der Leyen.

A full 91 per cent of tariffs shall be eradicated on the day the settlement comes into drive, with 97 per cent eradicated by the seventh yr.

Parmesan secure, however say au revoir to New Zealand made Feta

There had been fears New Zealand major industries and cheesemakers could be massive losers underneath the deal, with cheesemakers being pressured to cease utilizing names like parmesan, gouda, halloumi, mozzarella, brie, and camembert, which the EU sought to guard to be used by European producers underneath its system of geographic indicators, or GIs.

Those fears haven’t been realised in full, with New Zealand retaining the precise to make use of the names of many well-known cheeses.

New Zealand cheesemakers can nonetheless name their cheeses camembert, gouda, halloumi, mozzarella and brie. Producers who’re at the moment making parmesan can proceed to make use of the identify, although no extra will be capable of, as soon as the settlement comes into drive – when that occurs, the one new producers of parmesan must come from the Italian area of Parmesan.

Producers who’ve been making gruyère for greater than 5 years will proceed to have the ability to use the time period, however nobody else other than its conventional European producers.

The solely losers from the deal on GIs deal are producers of feta and port, who must drop the phrases inside 9 years of the deal coming into drive. From then, the one merchandise bought as feta and port in New Zealand must come from Greece and Portugal.

New Zealand producers can carry on making these merchandise, they’ll simply must name them one thing else.

Red meat sector sad

New Zealand has secured some wins for major industries, however some within the sector have stated it’s not sufficient.

Dairy and beef are anticipated to get $120m of latest export income from when the settlement enters into drive, rising to $600m inside seven years. On beef, for instance, New Zealand shall be allowed to export 10,000 tonnes to the European Union at a tariff of seven.5 per cent a yr.

The crimson meat sector was not blissful with that entry. Sirma Karapeeva, chief govt of the Meat Industry Association stated she was “extremely disappointed” the deal didn’t included “commercially meaningful access for our exporters”.

Beef + Lamb chief govt Sam McIvor stated the deal was a missed alternative to “return better prices to both companies and farmers,” and stated the EU had did not “live up to their rhetoric of being free traders”.

O’Connor stated that each side had made concessions on agriculture which was “sensitive” to each economies.

“It’s probably fair to say that no one likes it, so we probably have it about right,” O’Connor advised a press convention.

He stated each side needed to “compromise” as a result of each had “the same passion and commitment to support their food producers”.

Both sides conceded it was agriculture that had held up talks, which started in 2018.

Ardern stated the compromises have been well worth the deal, which she felt couldn’t be left on the desk.

The calculation now we have to make is that if we stroll away, will we lose the chance altogether. My calculation is that we might, and strolling away from $1.8b is just not one thing I used to be keen to do for the New Zealand financial system,” Ardern said.

Kiwifruit, fisheries, and Pharmac the big winners.

Big winners include the Kiwifruit and seafood industries.

Since the 1970s, Kiwifruit exporters had been paying $8.80 per $100 of exports to the EU. That tariff will be completely eliminated on day one of the deal.

Zespri chairman Bruce Cameron said the agreement would set New Zealand up to “broaden our exports to Europe, offering extra European customers with the best high quality Zespri Kiwifruit and serving to ship robust returns for our growers”.

Seafood currently has a 25 per cent tariff, this will also be eliminated on day one saving New Zealand exporters $25 per $100 of exports.

There had been fears the cost of medicines would increase under the agreement, with the European pharmaceutical industry lobbying for an extension of patent terms that would push up the price of drugs, hurting national drug-buying agency, Pharmac.

New Zealand has managed to push back on that ask, leaving patent terms unchanged, by the agreement, potentially saving Pharmac hundreds of millions of dollars a year.

What the EU gets

The EU wins the removal of all New Zealand tariffs on day one of the agreement entering into force. This is less of a win than it sounds, as New Zealand’s tariffs are already low and mainly exist so that they can be offered as a concession in trade negotiations.

One novel area of the FTA is the way it incorporates the Paris agreement into trade.

If either side believes the other one is falling short of its Paris goals it can take that accusation to arbitration and possibly apply penalties if the allegation is proved to be correct.

While there is a risk either side could find themselves penalised on those rules, Ardern said it “units the bar excessive” for other trade deals the EU does with other countries, setting higher international standards that could benefit New Zealand producers.

The agreement was concluded so late that the full text will not be released for another week.

Do not expect the agreement to come into force any time soon. To fully apply, it would need to be ratified by all 27 EU member states. The EU concluded an FTA with Canada in 2014 and it has yet to be fully ratified, although many parts of it entered into force in 2017.

Ardern said the deal would deliver greater benefits than the FTA concluded with the United Kingdom late last year. That deal included bigger wins, including the winding back of 100 percent of tariffs, but the EU is a market of about 450 million high income consumers, making the relative benefits much greater.

Speaking after her meeting with von der Leyen, Ardern highlighted New Zealand and the EU’s coordinated response to Russia’s aggression against Ukraine.

“While that is an extremely necessary day for our trade relationship, it is also a time to acknowledge the extraordinary time and challenges that Europe is dealing with,” Ardern said.

“We stand shoulder-to-shoulder with the European Union in condemning Russia’s unprovoked and unjustified struggle of aggression towards Ukraine,” she said, adding New Zealand’s “unwavering help” for Ukraine’s “independence, sovereignty and territorial integrity inside its internationally recognised borders”.

Some international commentators had floated the idea of Ukraine giving up territory to appease Russia. Ardern’s statements in Brussels today suggest New Zealand is very unlikely to back such a move.

New Zealand and the EU also signed a policing deal, agreeing to greater collaboration between the New Zealand police and European agency, Europol.

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