November 22nd, 2024

New Zealand fast-tracks ratification of NZ-EU Free Trade Agreement

The EU has already completed its ratification process, making it New Zealand's turn to fulfil its part of the agreement.

The EU stands as New Zealand’s fourth-largest trading partner, with bilateral goods and services trade valued at NZ$20.2 billion in 2022, accounting for 10.3% of New Zealand’s total trade.
The EU stands as New Zealand’s fourth-largest trading partner, with bilateral goods and services trade valued at NZ$20.2 billion in 2022, accounting for 10.3% of New Zealand’s total trade.

New Zealand's government is accelerating the legislative processes to enact the New Zealand-European Union Free Trade Agreement (NZ-EU FTA) well ahead of schedule, according to a government media release issued today. This strategic move is poised to unlock $46 million in tariff savings for Kiwi exporters in the current EU market season, highlighting the agreement's substantial economic implications.

What's happening: Trade and Agriculture Minister, Todd McClay, announced that Parliament intends to conclude the final legislative steps this week, enabling the NZ-EU FTA to take effect from 1 May, months sooner than initially anticipated. This expedited timeline is set to benefit Kiwifruit and Onion exporters significantly, with tariff savings of $43 million and $3 million, respectively, for this season.

  • Why it matters: The EU has already completed its ratification process, making it New Zealand's turn to fulfill its part of the agreement. Early enforcement of the FTA is expected to even the playing field for Kiwi businesses, bolster economic resilience, and support the government's ambitious goal to double export value within a decade.

Zoom in: The NZ-EU FTA promises substantial benefits for New Zealand, including:

  • An estimated annual GDP increase of up to $1.4 billion and a potential boost in exports to the EU by up to $1.8 billion by 2035.

  • Immediate removal of duties on 91% of New Zealand’s goods exports to the EU upon entry into force, escalating to 97% after seven years.

  • Yearly tariff savings of $100 million on New Zealand exports to the EU from day one.

  • The EU stands as New Zealand’s fourth-largest trading partner, with bilateral goods and services trade valued at NZ$20.2 billion in 2022, accounting for 10.3% of New Zealand’s total trade.

Details: Negotiations on the NZ-EU FTA concluded on 30 June 2022, and the agreement was officially signed on 9 July 2023 in Brussels. Its early implementation is a testament to the collaborative effort and commitment of all parties involved, aiming to maximise economic benefits for New Zealand.

  • The bottom line: With over 70% of New Zealand's exports soon to be covered by its FTA network, the NZ-EU FTA marks a significant milestone towards achieving free and fairer market access for New Zealand exporters.