NZ could face rougher road in free trade deal with EU compared to Australia

  • 11/07/2017
dairy export trade
Tariffs and quotas, particularly for NZ beef, lamb and dairy products will be key issues during trade talks.

New Zealand could face a rougher road in settling a free trade deal with the European Union compared to Australia.

Agriculture tariffs and quotas, particularly for New Zealand beef, lamb and dairy products are expected to be among the crucial issues during trade talks.

A Belgian MP in the European Parliament, Tom Vandenkendelaere, said there was a bigger focus on food for the New Zealand deal, whereas an Australian agreement would be much broader, particularly around service exports.

Mr Vandenkendelaere said the negotiations are potentially more contentious because of the agriculture aspect for New Zealand. 

"In that sense, negotiations could be approached in a more critical manner by the European public than might be the case with the Australians."

There has been a backlash against free trade agreements from some in the EU, and a deal with Canada was almost derailed last year when a Belgium regional parliament initially refused to sign off.

Mr Vandenkendelaere believed there were lessons for NZ in the Canadian and American trade deal sagas, and said NZ and the EU needed to be proactive about rallying public support for the deal.

"I have big pressure from my dairy producers to follow the negotiations with NZ critically," he said.

It was important to highlight existing success stories, he said, pointing to a Belgian-Dutch consortium that trades and sells bovine semen in NZ.

"Apparently it's hugely successful, and these are the stories that you need to tell," he said.

"Go out to your farmers and say we have high potential sheep breeds and we need to export them."

Finnish MP Hannu Takkula said people in his country were generally reluctant to buy foreign meat but NZ's produce had a good reputation for quality.

NZ Trade Minister Todd McClay met with EU counterpart Cecilia Malmstrom in Brussels in March this year, and the scope of a potential deal was finalised ahead of mandates being sought to kick start negotiations. 

Ms Malmstrom is expected to visit NZ later this year.

It's hoped negotiations between NZ and the EU will begin by the end of this year, and that a deal will be finalised in two to three years.

FAST FACTS:

  • The EU is NZ's third largest trading partner
  • Two-way trade is about $20 billion including $8 billion of exports from NZ
  • Existing trade arrangements are nearly 30 years old
  • EU exports to NZ are mostly manufactured goods while NZ exports to EU are mostly agricultural products

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