27 Jun 2023

Free Trade Agreement with EU takes significant step towards ratification

9:13 pm on 27 June 2023
Damien O'Connor

Damien O'Connor welcomed the approval from the European Council. Photo: RNZ / Samuel Rillstone

New Zealand's Free Trade Agreement with the European Union has taken a significant step towards ratification.

The European Council has given the deal the green light, paving the way for it to be signed - likely during the prime minister's visit to Europe next month.

But the agreement will not come into force until the European Parliament has approved it and New Zealand has passed legislation enabling it.

A spokesperson for Trade Minister Damien O'Connor said the government welcomed the European Council's approval.

"We'll have more to say in due course," the spokesperson said.

The long-awaited free trade deal with the major trading bloc was secured last July after four years of tough negotiating.

But New Zealand's chief negotiator Vangelis Vitalis previously warned the deal's ratification would take a significant amount of political effort.

"It is by no means a done deal and if you look at the reactions of both the dairy industry and the federated farmers equivalents in Europe you can already see that they're starting to muster their forces ... about how they were going to oppose this deal with New Zealand.

"This is going to be challenging, this is going to take a lot of political effort ... there's going to be a huge diplomatic effort to push this across the line."

European farmers continue to express their unhappiness with the agreement and argue it will give New Zealand farmers too much access to the European market.

Red meat and dairy will get up to $120 million worth of new annual export revenue on day one of the deal, with estimates of more than $600m within seven years.

During a meeting of the European Parliament's Committee on International Trade in Brussels Tuesday evening, chair of its agriculture committee Mazaly Aguilar questioned who in Europe would benefit from the deal.

"We don't disagree with the concept of global trade, but what I would argue strongly is that you need to look at things from the... eyes of our farmers... the meat sector and milk, the dairy sector, will almost certainly suffer.

"How could we possibly be expected to defend this to our farmers? How could we expect them to agree to such an agreement? How could expect them to support it?"

Copa Cogeca represents European farmers and its secretary general Pekka Pesonen told the committee "painful compromises" had been made on "sensitive" sectors like meat and dairy.

"At the moment, EU agriculture sectors are facing enormous pressure from every side and keeping our openness towards procedures in further trade agreements is becoming a real challenge," Pesonen said.

The agreement will see 91 percent of tariffs on New Zealand's exports to the EU immediately removed when it comes into force. Eventually, 97 percent will be duty-free.

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