EU clears way for free-trade talks

European approval paves path for settling before Brexit a deal that’s worth billions

The European Union last night cleared the way for free-trade agreement negotiations with Australia and New Zealand. The EU’s Foreign Affairs Council met in Brussels to approve the talks.

This paves the way for a multibillion-dollar deal before Britain leaves the EU next March.

Trade Minister David Parker welcomed the news, saying it opened the way for a free trade deal with one of the largest economies in the world that would boost jobs and incomes.

It would be worth billions of dollars to the New Zealand economy and he was hopeful it would go ahead.

“It’s very significant. That flows through to more jobs and higher incomes for New Zealanders.

“I’m sure one of the areas of sen- sitivity for the French is our agricultural exports to Europe and that will be a difficult part to negotiate. But we want to get the negotiations started,” Parker said.

He said credit had to go Prime Minister Jacinda Ardern whose strong advocacy for New Zealand’s interests during her recent trip to Europe helped tip the balance.

“These negotiations offer significant economic gains for New Zealand and the EU. They are an example of like-minded countries working together at a time when the world faces a rising tide of protectionism,” Parker said.

“The EU is our third-largest trading partner, with two-way trade worth more than $20 billion. Even excluding the UK, our trade with the EU is worth about $16 billion annually.”

EU Trade Commissioner Cecilia Malmstro¨m will travel to New Zea- land in June for the formal launch of negotiations. The first rounds of talks is set down for July in Brussels.

“At the start of negotiations, we’ll be releasing a package of information outlining our negotiating priorities for this agreement and how we will be engaging with New Zealanders as negotiations progress,” Parker said.

In September European Commission president Jean-Claude Juncker said he wanted to fast-track the deals during his annual state of the union address to the European Parliament.

He had wanted deals before the next European elections in May, two months after Brexit.

The EU has estimated a trade deal could result in a $1.2b to $2b boost to New Zealand’s GDP and up to a 20 per cent increase in exports.

It has been about a decade in the waiting and it was one of New Zealand’s top priority trade agreements.

New Zealand is also one of three nations at the top of the line for freetrade talks with Britain post-Brexit.

Last month, Ardern visited French President Emmanuel Macron in ●

Europe to ensure New Zealand still had France’s support. She also visited German Chancellor Angela Merkel, who has been an open champion for New Zealand in the talks.

Ardern followed in the steps of former Prime Ministers John Key and Bill English who also travelled to Europe to shore up support, especially after the Brexit vote meant New Zealand was losing its primary advocate in the EU: Britain.

Statistics New Zealand data shows exports to the European Union for the year ended December were worth $8.61b, with imports of $12.98b.

New Zealand’s total exports were worth $76.34b for that period, with imports of $72.19b.

The Ministry of Foreign Affairs and Trade (Mfat) website lists five things New Zealand wants to achieve with a EU-NZ trade deal:

Lower costs for consumers, making things like food and consumer goods cheaper for New Zealanders.

Level the playing field for businesses in NZ and the EU by reducing tariffs, duties and other trade barriers.

Ensure the trade deal works for companies of all sizes, big and small.

Drive economic progress in a way that protects the environment and contributes to better living conditions.

Safeguard our ability to regulate and decide what is best for New Zealand and our people.

The EU is the world’s biggest trading entity, and many New Zealand businesses have interests there.

A free-trade agreement would reduce the prices businesses paid at the European Union border by removing tariffs (import duties) and other barriers, Mfat said.

It would also level the playing field with countries that are already paying less because of existing free-trade agreements.