New Zealand, EU Sign Free Trade Agreement
- July 1, 2022
- Posted by: Quatro Strategies
- Category: Politics
The European Union and New Zealand reached a free trade agreement on Thursday. The flow of goods and services is expected to increase by 30% with the deal, as Europe has scrambled to strengthen alliances to make up for its business withdrawal from Russia.
EU Trade Commissioner Dombrovskis said the deal sent an important “geopolitical signal” and added that the bloc would seek further partnerships.
Dombrovskis told reporters that the EU’s need to diversify away from Russia has become clear and they would continue to look for new markets and supply chains, and the deal with New Zealand was a step towards that goal.
A majority of EU member states have urged the Commission, which oversees trade policy, to accelerate the conclusion of trade agreements to avoid others taking its place.
New Zealand Prime Minister Ardern said it had taken 14 years since a trade agreement idea was first mentioned.
Negotiations have been ongoing for four years. The EU hopes the free trade deal will put it on par with countries that already have a trade deal with New Zealand, particularly those of the 11-nation CPTPP Asia-Pacific deal.
The bloc also aims to catch up with Britain, which has signed trade agreements with both Australia and New Zealand, although they are still to come into effect.
The agreement will remove tariffs on a wide range of products. It will also be the first such deal by the EU to include potential sanctions for violations of environmental or labour standards, a concept only proposed last week.
Tariffs will fall for EU exports such as clothing, chemicals, pharmaceuticals and cars, as well as wine and confectionary. The EU will increase its quota of New Zealand’s agricultural exports, including beef, a sensitive area for France in particular, lamb, butter and cheese.
The deal is estimated to come into force in 18-24 months, subject to approval by the European Parliament and EU governments, a process which has in some cases dragged on for years.
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