At a time when the media is abuzz with gloomy stories about the future of trade, New Zealand and the EU have taken the next step towards negotiating a high-quality, comprehensive and ambitious new trade agreement.
Nearly two years of preparatory FTA scoping discussions have been brought to a close by Trade Minister Todd McClay and European Trade Commissioner Cecelia Malmström, meeting in Brussels on 7 March. The joint exercise was intended to establish the parameters for a new trade agreement between New Zealand and the European Union. Minister McClay and Commissioner Malmström have now agreed to take the next step in the negotiating process: the European Commission will proceed to seek a negotiating mandate from Member States and in turn New Zealand can develop its own mandate. It is expected that the negotiations proper will begin later this year. Both sides are keen to complete negotiations within a relatively speedy (in FTA negotiating terms!) couple of years, although there are other factors that may slow the process and could well have an impact on the substance – notably the post-Brexit UK-EU relationship, and broader questions around EU unanimity on trade negotiations.
Europe is already a very significant partner for New Zealand: a 510-million strong market ranking as our third-largest export destination (with goods and services exports worth NZD$8.8 billion in the year ended June 2016); our single-biggest supplier of imports, and our second-largest source of investment. Important sectors include agriculture, horticulture, wine, tourism, education and niche manufacturing, and a range of sophisticated and high-value consumer goods and services on the import side. But the potential goes well beyond traditional trade patterns, and offers substantial benefits for both parties: there is huge scope to develop and deepen global value chains and networks spanning from Europe into the Asia-Pacific, incorporating the best of New Zealand and European goods, services, R&D, technology, ideas and innovation to service customers beyond both our shores.
Minister McClay and Commissioner Malmström have also indicated that they are thinking about how to engage the public more effectively on trade as part of the negotiating process. This is likely to result in greater transparency in the negotiations – something that NZIBF has long advocated, particularly in light of the highly contentious public debates over TPP and other recent trade negotiations. Just as importantly, it gives both sides a valuable opportunity to affirm our common values and the shared benefits of more open markets, at a time when it can otherwise seem hard to escape the long shadow of protectionism, global retrenchment and insular thinking.
This post has been prepared by Stephanie Honey, Associate Director of the New Zealand International Business Forum. For our discussion paper on an EU-New Zealand FTA, click here.