On 9th July, the EU and New Zealand (NZ) reached an agreement on a Free Trade Agreement (FTA). From an agricultural perspective its key provisions include:
- Elimination of all duties on EU agri-food exports to New Zealand: will be effective upon entry into force. This also includes wine, confectionary and dairy products including speciality cheeses.
- NZ access to the EU: greater access has been achieved for its agricultural exports to the EU, including for;
- Beef: a new tariff rate quota (TRQ) for 10,000 tonnes (t) with a reduced duty of 7.5%. This volume will be gradually phased in over 7 years from entry into force of the agreement.
- Sheepmeat: a new 38,000t TRQ to be imported duty-free. Again, this volume will be gradually phased in over 7 years.
- Milk powder: a 15,000t TRQ with a 20% import duty, to be phased in over 7 years.
- Butter: for the pre-existing TRQ of 41,177t which currently attracts a 38% import duty, for 21,000t of this TRQ, the duty will gradually be reduced to 5%. There will also be a new butter TRQ of 15,000t which will also see in-quota duty rates gradually fall to 5%. This means the NZ TRQ access will increase to 56,177t, with 36,000t of this seeing duties gradually fall to 5%.
- Cheese: a new TRQ of 25,000t to be imported duty-free. This will gradually be phased in over 7 years. NZ’s existing TRQs of 6,031t allocated under the EU’s WTO schedule will see tariffs eventually reduced to 0%.
- High-protein whey: new 3,500t TRQ to be phased in over 7 years at 0% duty.
- Other TRQs: for sweetcorn (800t) and ethanol (4,000t) will also be eventually at zero duty.
- Sustainability: both sides claim that the dedicated Chapter on Sustainable Food Systems and Animal Welfare makes significant advances on the provisions of most existing trade deals and that the parties will work together on animal welfare, food, pesticides and fertilisers.
- Geographic Indicators (GIs): the EU claims that 163 of its most renowned food GI’s will be protected in NZ as well as the full list of GIs for EU wines. GIs for 23 NZ wines will also be protected in the EU market.
The agreement will draw inevitable comparisons with the UK-NZ trade deal. Certainly, NZ’s access to the EU market is much more curtailed for beef, sheepmeat and dairy products in comparison to the relatively more generous access that the UK has granted. Therefore, the competitive pressures exerted on EU producers as a result of this deal will be much less pronounced. Over the longer term, for EU Member States such as Ireland, the UK-NZ trade deal could end up being more influential on its animal product sales as NZ exports to the UK could displace notable volumes of Irish beef exports to the UK.
Both the EU and NZ will now begin the ratification processes for this deal. Therefore, the entry into force of this FTA is still some time away.