EU deal valued at $2b for Kiwi exporters

A free-trade deal between the European Union and New Zealand could boost exports by $2 billion a year and save Kiwis ‘‘hundreds of millions of dollars a year’’ in cheaper imports, a business body says.

Business groups have welcomed the prospect of the free-trade deal, with agriculture bodies seeing a big upside.

New Zealand Europe Business Council president Franck Olssen forecast an agreement could be reached in two years, now the EU has green-lit negotiations, but it was ‘‘unrealistic’’ to expect tariff-free trade for all agricultural products.

The council was established in 2005 to boost two-way trade. Its members include European trade offices, embassies and consulates.

NZ International Business Forum chairman Malcolm Bailey said concessions the EU was likely to demand could include more food labelling rules.

That could, for example, require new names for the likes of New Zealand-made ‘‘parmesan’’ cheese.

The EU would also probably want a guaranteed level playing field for European companies competing for government contracts and better rules for Europeans investing in New Zealand.

While New Zealand had the most to gain from reducing tariffs, ‘‘clearly [the EU] will be focused on all of the things that come in high-quality 21st-century trade agreements, such as services, investment and intellectual property,’’ he said.

Agriculture has tended to be a sticking point in trade talks in the past, but Bailey said he did not want to anticipate such problems.

‘‘We know the sensitivities from their point of view but our view is the world population is growing, demand for highquality food is growing in many parts of the world, and a protectionist approach is becoming increasingly anachronistic.’’

Beef & Lamb New Zealand chief executive Sam McIvor said red-meat exports to the EU were worth $1.8 billion in the year to December, despite Kiwi exporters having to pay about $53m a year in tariffs.

‘‘It is New Zealand’s largest market by region for sheepmeat exports and secondlargest for wool and chilled beef exports. It takes our highest quality and value cuts.’’

The agreement to start negotiations on a free-trade deal with the EU was a significant milestone for the industry in the face of ‘‘growing protectionist rhetoric worldwide’’, McIvor said.

Dairy Companies Association executive director Kimberly Crewther said New Zealand exported $260m of dairy products to the EU last year, the majority of which were ‘‘protein products’’ that faced lower tariff levels.

Two-way trade between New Zealand and the EU is worth about $20 billion.