Europe opens up to Kiwi business
Continuing to build its influence following the shockwaves of Brexit, the European Union was in New Zealand this week to sign a Partnership Agreement for Relations and Co-operation - an arrangement known as PARC.
The EU’s High Representative Frederica Mogherini said: ‘‘In taking this important step, we are showing not only the breadth and depth of our existing relationship, but demonstrating that we want to expand our partnership over the coming decades. It is a partnership that benefits our citizens first and foremost, and one that has the potential to grow even further in the future.’’
Having better access to the EU’s 500m citizen consumers must be a tantalising prospect for Kiwi technology, agriculture and dairy in particular. But the EU’s aggressive pursuit of both NZ and Australia trade relationships will be an interesting exercise to watch.
The EU’s poorest nations rely heavily on agriculture. In fact, one of the attractions of joining the bloc for these nations has been the heavy subsidies handed out. These make up an incredible 40 per cent of the EU’s budget.
New Zealand’s 3.5 billion euro exports to the EU are already dominated by agricultural products, while 4.6 billion euros worth of imports are largely manufactured goods, revealing that the balance is already tipped in the EU’s favour.
Allowing Kiwi agriculture greater access to Europe will be an almighty threat to these struggling economies. The EU is also promising to do something special for small and medium businesses in the longer term too. What that will be is unclear at this stage, but one can assume some sort of incentives and export tariff discounting to be at the heart of it.
The prospect of a Free Trade Agreement looks good for New Zealand, although there have already been mutterings about taking into account ‘‘agricultural sensitivities.’’ To take such a step must be delivering in other areas for the EU in influence, security policy and development in the southern hemisphere.
We should seize this new opportunity to find a fresh portal into Europe, remembering that there will be a price to pay.