‘Historic moment’: EU and New Zealand strike trade deal with climate and gender equality provisions

The European Union and New Zealand on Thursday concluded negotiations for a free trade agreement expected to boost bilateral trade by nearly a third.

Commission President Ursula von der Leyen described it as a “historic moment” while Jacinda Ardern, New Zealand’s Prime Minister, said it was “an important day”.

The New Zealand leader hailed the agreement as “high quality, inclusive” with her Commission counterpart emphasising that it has “has very important innovation to bring just and green growth.”

This is the first free trade agreement the EU has struck in which it has integrated commitments toward the Paris Climate Agreement.

“It contains, again, for the first time, provisions on fossil fuels. This clearly reflects our common goal of reducing fossil fuel subsidies and reforming fossil fuels subsidies, in particular through the WTO, and we show the same ambition on core international labour standards, and on gender equality, to advance women’s economic empowerment.

“So this agreement will bring major benefits to our economies but also to our societies,” von der Leyen said. 

The agreement plans for the complete eradication of tariffs on EU exports to New Zealand and opens the New Zealand services market in key sectors such as financial services, telecommunications, maritime transport and delivery services to EU companies.

It also will improve access for European businesses to New Zealand’s government procurement contracts for goods, services, works and concessions, and aims to facilitate data flows.

Tariffs on a range of EU agricultural or food products, including pig meat, wine, sparkling wine, and chocolate will also be lifted. The agreement also protects the full list of EU wines and spirits such as Prosecco and Champagne as well as 163 other renowned traditional products ranging from cheeses to marzipan and olives.

Ardern also hailed the ” groundbreaking commitments” on environment, labour rights and gender quality and the “new opportunities” the deal provides.

“It cuts costs and red tape for our exporters in a hugely important market and makes bold, further steps for sustainability.”

“It provides duty-free access for 97% of New Zealand’s current exports to the EU — 91% of those from day one — and increases the value of New Zealand exports to the EU by a forecast 1.8 billion NZD (€1.07 billion) per year by 2035,” she said.

The negotiated texts, four years in the making, will now go through legal revision. The Commission will then submit the agreement for signature and conclusion to the Council where it must be unanimously agreed upon. If backed by all 27 leaders, it will then require the consent of the European Parliament and the ratification from New Zealand to come into force. 

An EU official stressed that the Commission is “not worried” about any member state vetoing the agreement.

The official could not provide a precise timeline as to when it might actually be ratified by the Council and passed by the Parliament but said that “we certainly hope that this agreement will be signed next year.”

The trade agreement comes at the end of the six-month French Presidency of the EU, which was notoriously reluctant to address the stalled trade deals. But the Czech Republic, which takes over on 1 July, is determined to push for close trade relations with other like-minded countries, like New Zealand, Australia, Mexico and Chile.

“The Czech Republic is an advocate of open business,” said Mikuláš Bek, minister for European affairs. “It’s clear the loss of opportunities in Russia needs to be balanced by opening [new] opportunities in other parts of the world.”