Agreement over New Zealand's free trade deal with European Union goes down to the wire

By Katie Scotcher for RNZ

Power Play - The Prime Minister travelled to Brussels with two speeches prepared.

One detailed a historic trade deal, the other why she would leave Brussels without one.

It would be a note from Jacinda Ardern sent to the European Commission President Ursula von der Leyen just hours before they walked up to the podium at the commission's headquarters that would get the agreement over line.

Once she received a response, Ardern knew which of the two speeches she would deliver.

Ardern's visit to Brussels had come at a critical time for trade talks that were formally launched between New Zealand and the European Union in 2018.

At the time, it was hoped a deal would be struck within a few years. It quickly became clear progress would be slow and it would likely take longer.

Ardern has been frank about how tough the trade talks have been.

"Negotiating with the EU is hard. They have a history of being very guarded, very protectionist and the very areas New Zealand seeks to have access on are the very issues they seek to protect," Ardern said.

It is understood von der Leyen had made a commitment to Ardern a trade deal would be struck in 2021, but because of outstanding technical issues, that did not happen.

Instead, 2021 marked a period when negotiations slowed even more, with a six month stretch at the end of the year where no formal talks were held.

Reports from Europe in November suggested France had convinced the EU to delay reaching trade agreements until after its presidential election in April.

Ministry of Foreign Affairs and Trade chief executive Chris Seed has previously confirmed the election had indeed "sucked the oxygen" out of talks.

To try and build momentum again the government set negotiators a June deadline to get an agreement over the line.

In March, there were signs it was working. New Zealand's chief negotiator Vangelis Vitalis described progress at formal talks that month as "solid" and said officials would shift to rolling negotiations to get the deal done.

But at that point the EU had not yet put another agriculture market access offer on the table. The first, which was leaked to European media in 2020, had outraged the former trade minister David Parker.

"Very disappointed with the poor quality of the offer, which really was protectionist of their interests," Parker said at the time.

Going into negotiations, New Zealand knew getting more access for New Zealand farmers would be difficult. Some EU members were reluctant to open up market access in order to protect their own domestic industries.

It was not until a few weeks before Ardern left for Europe a second agriculture offer was put on the table.

New Zealand exporters had caught wind of this from Europe and were worried it was not much better than the last offer. Meat Industry Association chief executive Sirma Karapeeva said "New Zealand red meat exporters would continue to face an unlevel playing field in the EU" if that was the case.

They urged the government to leave Brussels without securing a deal if they could not get an improved deal.

As Ardern's visit to Brussels crept closer, she became more frank about her willingness to do that.

"I am very willing to come away from Europe without final conclusion of those talks if we don't see commercially meaningful access for our exporters," she said on the eve of her visit.

But leaving Europe without a deal secured would have been a serious risk. It could have meant losing all of the gains negotiators had made. The government knew it could be years before it had another shot at securing a deal.

It was also aware of the pressure facing European governments over soaring inflation, the energy crisis and food security caused by the war in Ukraine.

While some European governments saw those issues as reason to build resilient supply chains (the same view as New Zealand), others saw it as a reason to focus on protecting its domestic interests. The environment to secure a deal was becoming increasingly volatile.

Ahead of her visit to Brussels, Ardern met with the leaders of Spain, France, Germany, Italy and Denmark in Madrid. She wanted to get as many EU members as possible lobbying to get the deal done.

"We need advocacy because we do have some areas that continue to be niggly for a small number of economies and we need those who support us - and there are many - to support us to get it over the line," Ardern said.

It's understood it was Ardern's political lobbying that got the deal over the line. Specifically, it was a note she sent to von der Leyen just hours before it was announced that a deal had been secured.

The government is hailing the trade deal as a success, but some New Zealand and European farmers disagree.