New Zealand has secured a major free trade deal with the European Union which is set to grow export revenue by up to $1.8 billion annually on full implementation and boost the local freight and transport sector.
The deal will provide duty-free access on 97% of New Zealand’s exports to the EU after seven years and over 91% of current goods the day the FTA comes into force.
NZ exporters are set to save around $110 million per annum on tariff elimination, with $100m slashed from day one.
It will deliver immediate tariff elimination for all kiwifruit, wine, onions, apples, mānuka honey and manufactured goods, as well as almost all fish and seafood, and other horticulture products.
The EU is the largest export market for New Zealand kiwifruit growers, and the complete removal of tariffs delivers more than $37m in annual savings on kiwifruit from day one.
For fish and seafood exports, annual tariff savings will reach $20m a year.
It could also deliver up to $600m in additional export revenue for dairy and red meat sector once fully implemented, with an eight-fold increase in beef access to the EU market.
The agreement will give New Zealand market access into 27 European countries and is set to be more lucrative than the recent UK free trade agreement.
The EU is New Zealand’s fourth-largest trading partner with two-way goods and services trade was worth NZ$17.5b for the year to December 2021.
“This is the fifth free trade agreement the Government has concluded in the past five years and sits alongside upgrades to our existing agreements with Singapore and China,” prime minister Jacinda Ardern says.
“The increase in market access we’ve negotiated means 73.5% of our global exports are now covered by an FTA, up from only around 50% when we took office.”
“New Zealand exporters offer some of the best products in the world and the Government will keep working alongside industry and business to unlock access and opportunities like those delivered into Europe,” she says.
Trade minister Damien O’Connor, who spent the week in Brussels negotiating with his counterparts, says the deal provides access for products that were previously locked out in the historically difficult to access European market.
“This agreement delivers on what has been a long-standing objective of successive New Zealand governments – an FTA with the European Union, which will help accelerate New Zealand’s economic recovery at a time of global disruption,” O’Connor says.
“This FTA also helps to level the playing field and creates significant opportunity for more great Kiwi businesses to diversify into this high-value market.
“This is a good news for our services exports too. The deal, will bring the EU services market closer to New Zealand for our entrepreneurs by reducing red tape and making it easier to do business on the ground in a market of nearly 450 million high-value consumers,” he says.
“Importantly, the services and investment ‘Most Favoured Nation’ outcome will ensure the FTA remains at the cutting edge, with New Zealand able to receive the benefit of services market access and investment treatment the EU may agree to in future FTAs.
“It also delivers a positive outcome for New Zealand businesses seeking access to EU’s large government procurement market for goods and services worth more than $3 trillion. This deal provides enhanced access to a range of EU procurement opportunities across all levels of government, including new opportunities in healthcare, airports and ports,” O’Connor says.
