By Rebecca Howard
May 23 (BusinessDesk) - News that trade negotiations will begin between New Zealand and the European Union, the country's third-largest trading partner, has been well received by local business chiefs.
The agreement to start negotiations represents a significant milestone for the sector in the face of growing protectionist rhetoric worldwide, said Beef + Lamb New Zealand chief executive Sam McIvor in a statement. "The FTA will create a stable and level playing field which is crucial to the growth and future prosperity of the sheep and beef sector and New Zealand as a whole," he said.
The Council of the European Union authorised the opening of talks with New Zealand and Australia overnight and "these agreements will build on the recent successful agreements with Canada, Japan, Singapore, Vietnam, as well as Mexico among others, expanding the alliance of partners committed to open and rules-based global trade, said European Commission president Jean-Claude Juncker in a statement.
Two-way trade between New Zealand and the EU is worth more than $20 billion. "Even excluding the UK, our trade with the EU is worth about $16 billion annually, Trade and Export Growth Minister David Parker said.
According to McIvor, the European Union is an important market for New Zealand red meat products, worth over $1.8 billion in 2017. It is New Zealand’s largest market by region for sheepmeat exports and second-largest for wool and chilled beef exports.
Meat Industry Association chief executive Tim Ritchie says the sector still faces a range of significant tariff and non-tariff barriers into this market. “New Zealand pays approximately $53 million in tariffs per year on its red meat exports to the EU," he said in the joint statement with Beef + Lamb New Zealand.
As a result, the sector looks forward to working with the New Zealand Government and European organisations to generate new opportunities for agricultural and food producers under an EU-NZ FTA, he said.
ExportNZ executive director Catherine Beard was also upbeat. Having competitive access into such a big trade bloc would be a huge boost for New Zealand exporters, said Beard. "We still face significant tariffs on many of our agricultural exports in European markets, which reduce our competitiveness in those markets," she said.
EU Trade Commissioner Cecilia Malmström will travel to New Zealand in June for the formal launch of negotiations. "We will now negotiate win-win trade deals that create new opportunities for our businesses, as well as safeguard high standards in key areas such as sustainable development," she said in a statement.
According to the EU, having trade agreements with Australia and New Zealand would provide EU businesses with a valuable entry point into the wider Asia-Pacific region. They will also put European companies on an equal footing with those from the other countries in the area that have signed up to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or that already enjoy better access to Australia and New Zealand through other preferential trade agreements.
The first rounds of talks is set down for July in Brussels. EU and New Zealand officials have said negotiations could take two to three years, according to the Ministry of Foreign Affairs and Trade.