Brussels, 9 July 2023
The EU and New Zealand signed today their free trade agreement (FTA), which will deliver significant gains for the EU. The deal will cut some €140 million a year in duties for EU companies from the first year of application. As a result, bilateral trade is expected to grow by up to 30% within a decade, thanks to this deal, with EU annual exports potentially growing by up to €4.5 billion. EU investment into New Zealand has a potential to grow by up to 80%. This landmark agreement also includes unprecedented sustainability commitments, including respect of the Paris Climate Agreement and core labour rights.
Furthermore, the Commission and New Zealand signed today the association agreement on the participation of New Zealand to Horizon Europe, the EU’s research, and innovation programme. This marks the first association with a close partner that is not geographically close to Europe. It marks a completely new approach whereby the EU is strengthening even more its ties with trusted partners that have a solid scientific base and a robust research track record.
The statement of President von der Leyen, announcing both agreements together with Chris Hipkins, Prime Minister of New Zealand, will be available shortly.
You can follow the press conference by Executive Vice-President Dombrovskis and Damien O’Connor, Minister of Trade and Export Growth of New Zealand, on the Free Trade Agreement between the EU and New Zealand live on Ebs.
Further details are available online (here and here).
EU and New Zealand sign ambitious free trade agreement
The EU and New Zealand have today signed their free trade agreement (FTA), which will deliver significant gains for the EU. The deal will cut some €140 million a year in duties for EU companies from the first year of application. As a result, bilateral trade is expected to grow by up to 30% within a decade, thanks to this deal, with EU annual exports potentially growing by up to €4.5 billion. EU investment into New Zealand has a potential to grow by up to 80%. This landmark agreement also includes unprecedented sustainability commitments, including respect of the Paris Climate Agreement and core labour rights.
The agreement is now sent to the European Parliament for its consent. Following the completion of the ratification process in both the EU and New Zealand, the deal enters into force.
Trade agreements are part of the EU’s open trade – or ‘partnering’ – approach, which is one of the three goals of the European Economic Security Strategy presented last month. This agreement with New Zealand also demonstrates how the EU is stepping up engagement with this burgeoning region of the world, delivering on its Indo-Pacific Strategy.
Ursula von der Leyen, President of the European Commission, said:
“New Zealand is a key partner for us in the Indo-Pacific region, and this free trade agreement will bring us even closer together. With today’s signature, we have taken an important step in making the agreement a reality. This modern free trade agreement brings major opportunities for our companies, our farmers and our consumers, on both sides. With unprecedented social and climate commitments, it drives just and green growth while reinforcing Europe’s economic security”.
New export opportunities for businesses big and small
The EU-New Zealand FTA will provide new opportunities for businesses by:
- eliminating all tariffs on EU exports to New Zealand;
- opening the New Zealand services market in key sectors such as financial services, telecommunications, maritime transport and delivery services;
- ensuring non-discriminatory treatment to EU investors in New Zealand and vice versa;
- improving access for EU companies to New Zealand government procurement contracts for goods, services, works and works concessions;
- facilitating data flows, predictable and transparent rules for digital trade and secure online environment for consumers;
- preventing unjustified data localisation requirements and maintaining high standards of personal data protection;
- helping small businesses export more through a dedicated chapter on small and medium enterprises;
- significantly reducing compliance requirements and procedures to allow for quicker flow of goods;
- significant commitments by New Zealand to protect and enforce intellectual property rights, aligned with EU standards.
Agri-food: stimulating EU exports while shielding EU sensitivities
EU farmers will have much better opportunities to sell their produce in New Zealand immediately upon application of the agreement. Tariffs will be eliminated as of day one on key EU exports such as pig meat, wine and sparkling wine, chocolate, sugar confectionary and biscuits.
EU farmers will see benefits beyond the tariff cuts. The FTA will protect the full list of EU wines and spirits (close to 2,000 names) such as Prosecco, Polish Vodka, Rioja, Champagne and Tokaji. In addition, 163 of the most renowned traditional EU products (Geographical Indications), such as Asiago, Feta, Comté or Queso Manchego cheeses, Istarski pršut ham, Lübecker Marzipan, Elia Kalamatas olives will be protected in New Zealand.
The agreement takes into account the interests of EU producers of sensitive agricultural products: several dairy products, beef and sheep meat, ethanol and sweetcorn. For these sectors, there will be no liberalisation of trade. Instead, the agreement will allow zero or lower tariff imports from New Zealand only in limited amounts (through so-called Tariff Rate Quotas).
The most ambitious sustainability commitments in a free trade agreement ever
The EU-New Zealand FTA is the first one to integrate the EU’s new approach to trade and sustainable development announced in the Communication “The power of trade partnerships: together for green and just economic growth”, adopted just a week before the negotiations of the free trade agreement were concluded in June 2022.
Both sides agreed to ambitious TSD commitments covering a wide range of issues based on cooperation and strengthened enforcement. For the first time ever in an EU free trade agreement, the deal has a dedicated sustainable food systems chapter, a dedicated trade and gender equality article and a specific provision on trade and fossil fuel subsidies reform. The deal also liberalises environmental goods and services at entry into force.
Next steps
The text will now be transmitted to the European Parliament for consent. After the consent by the Parliament, the Council can adopt the Decision on conclusion, and once New Zealand notifies that it has also completed its ratification procedure, the agreement can enter into force.
Background
Negotiations for an FTA with New Zealand started in June 2018. 12 negotiating rounds took place up to March 2022, followed by intersessional discussions leading up to the conclusion of the negotiations on 30 June 2022, when the deal was announced by President von der Leyen and then New Zealand Prime Minister Ardern, in the presence of Executive Vice-President Dombrovskis, and New Zealand Trade Minister O’Connor, who led the negotiations on either side.
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New Zealand is a key partner for us in the Indo-Pacific region, and this free trade agreement will bring us even closer together. With today’s signature, we have taken an important step in making the agreement a reality. This modern free trade agreement brings major opportunities for our companies, our farmers and our consumers, on both sides. With unprecedented social and climate commitments, it drives just and green growth while reinforcing Europe’s economic security.
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This landmark free trade agreement with New Zealand will unlock a raft of fresh export opportunities for EU businesses and SMEs for both goods and services. It also contains the most state of the art sustainability commitments of any EU free trade agreement ever, including on climate and labour rights. We are operating at a time of challenging geopolitical shifts, and ambitious trade deals with reliable and like-minded partners therefore more valuable than ever. They drive opportunity while providing a solid platform for cooperation. I look forward to swift ratification by the European Parliament and the New Zealand side so this Agreement can quickly enter into force and benefit our economies and our green transition.
New Zealand joins Horizon Europe Research and Innovation Programme
Today in Brussels, the Commission and New Zealand signed the association agreement on the participation of New Zealand to Horizon Europe, the EU’s research, and innovation programme.
This marks the first association with a close partner that is not geographically close to Europe. It marks a completely new approach whereby the EU is strengthening even more its ties with trusted partners that have a solid scientific base and a robust research track record.
Association to Horizon Europe means that researchers and organisations in New Zealand will be able to participate in Pillar II of the programme, the most relevant and biggest collaborative part that is primarily focused on shared global challenges in climate, energy, mobility, digital, industry and space, health, and more. They will collaborate in the programme on equal terms with entities from the EU Member States and will have access to Horizon Europe funding and networks of researchers in Europe and beyond aimed to tackle global challenges.
In the presence of the Commission’s President Ursula von der Leyen and New Zealand’s Prime Minister Chris Hipkins, Director-General of the Commission’s department for Research and Innovation, Marc Lemaître signed the agreement with New Zealand’s Ambassador to the EU and NATO, Carl Reaich and HE Marcos Alonso, Ambassador Permanent Representative of the Kingdom of Spain to the EU.
President Ursula von der Leyen said:
“I am glad that we are allowing New Zealand to participate in Horizon Europe, our flagship innovation programme. This is the first association agreement with a country that is not geographically close to Europe, but very close in so many other ways, including the capacity and willingness to innovate. We are looking forward to pooling our best minds and talents to work together on the next generation of clean tech, biotech and digital projects.”
Deeper collaboration with New Zealand contributes to Europe’s global approach to cooperation in research and innovation in an increasingly changing and volatile world. It reconfirms the EU commitment to driving excellence, pooling resources for faster scientific progress, developing vibrant innovation ecosystems and promoting global openness that is also strategic and reciprocal.
The Horizon Europe programme introduced a major redesign of the approach towards international cooperation in research and innovation, giving for the first time the possibility of association to like-minded countries with a strong science, innovation and technology profile, outside the geographic proximity of the EU. Formal negotiations to join Horizon Europe are currently ongoing with Canada and recently the Commission has launched negotiations with the Republic of Korea. Exploratory talks with Japan closed in September 2022 and technical discussions are ongoing.
Background
Formal relations between the EU and New Zealand in the field of research and innovation date back to 2009, with the signature of the Agreement on cooperation in scientific and technological cooperation. The Agreement has provided the general framework for cooperation and acted as a forum for regular discussions about research priorities and areas of common interest ever since.
Horizon Europe is the biggest EU research and innovation programme ever with a budget of €95.5 billion. It is open, which means that participants from all over the world can participate in most calls.
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Quote(s)
I am glad that we are allowing New Zealand to participate in Horizon Europe, our flagship innovation programme. This is the first association agreement with a country that is not geographically close to Europe, but very close in so many other ways, including the capacity and willingness to innovate. We are looking forward to pooling our best minds and talents to work together on the next generation of clean tech, biotech and digital projects.
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Today marks a historic moment in building a new facet of EU-New Zealand bilateral relations. Association to Horizon Europe is the strongest form of collaboration offered by the EU in research and innovation. This is excellent news for researchers in both EU and New Zealand. Together, we can tackle the most pressing challenges: climate change and digital adaptation, clean oceans, energy efficiency, public health and so much more.