12 Jun 2020

Trade Minister 'very disappointed' with EU's first offer on free trade deal

11:50 am on 12 June 2020

The first formal offer on the table from the European Union on a free trade agreement is a far cry from what New Zealand wants, but talks will continue with both parties appearing willing to strike a deal.

Flags in front of the EU Commission building in Brussels.

EU flags flying in front of the EU Commission building in Brussels. Photo: 123RF

Trade Minister David Parker said the deal is nowhere near good enough and has criticised the EU for taking a negative and protectionist approach.

But National said the government needs to turn up the heat in negotiations.

Almost two years into the trade talks, David Parker said the offer on the table would see New Zealand exports heavily tariffed, while European Union farmers would be protected.

"Very disappointed with the poor quality of the offer, which really was protectionist of their interests," Parker said.

He gave an example of what the proposed deal would mean for New Zealand.

"At the moment, the European Union export a kilogram of cheese per head of population to New Zealand. The offer back the other way was three grams of cheese per European consumer, and even then with tariffs and volumetric controls," Parker said.

David Parker announces next steps in Overseas Investment Act reform

David Parker has criticised the EU for taking a "negative and protectionist" approach to talks on a free trade agreement. Photo: RNZ / Ana Tovey

National's Trade spokesperson Todd McClay said the minister needs to redouble his efforts.

"The minister needs to get on the telephone and have frank discussions with the European Union and find a way through this that is good for New Zealand exporters.

"David Parker made a promise two years ago that he would deliver a high quality free trade agreement with the European Union by the election, his time is now running out," McClay said.

As one of the only World Trade Organisation members without a deal, New Zealand desperately needs this, he added.

"Canada, who we compete with in agricultural access, got one a few years ago. Their deal was an exceptional one for agricultural product, David Parker should be saying 'we'll take nothing less than the same as the European Union gave Canada' and actually demand that we're treated equally and fairly," McClay said.

Federated Farmers dairy spokesperson Chris Lewis also wanted to see the trade minister pile on the pressure.

"We've just got to be a step above the other negotiators and ... probably other countries we're competing against ... we've just got to make sure we've got the best product and the best deal.

"This is where David Parker and his team must be focused 150 percent and make sure it happens. Reputations are at stake," Lewis said.

Waikato dairy farmer Andrew McGiven said there is no reason the EU should see New Zealand cheese or butter as a threat. But he was not surprised by the proposed deal.

"Dairy seems to be the first football on the playing field to be bounced around. Ultimately we'd love to have that free trade agreement and ultimately love to have it including dairy but if we can get anything at this stage, it would certainly be a bonus and hopefully we can build on that relationship later on," McGiven said.

The executive director of the New Zealand International Business Forum, Stephen Jacobi, agreed the offer is disappointing.

But he said Covid-19 has presented negotiators with a unique opportunity.

"That is to be able to be able to demonstrate to the world that it is possible to create the conditions of free and open trade, and trade can be used as a means to promote the economic recovery which is so badly needed after Covid-19.

"The European Union likes to style itself as a leader on trade and New Zealand certainly likes to do that as well, so it's natural the two should come together," Jacobi said.

While the offer is seen by New Zealand as terrible, there is still optimism talks will continue, and that enough progress can still be made to reach a deal New Zealand can sign up to.

The European Union is making little public comment but told journalists there is "frequent engagement" between the EU Trade Commissioner Phil Hogan and minister David Parker, as part of the talks ahead of the eighth negotiating round, taking place this week and next.

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