Only New Zealand will benefit from ‘painful’ trade deal

Only New Zealand can benefit from the comprehensive trade agreement with the EU, on which a political agreement was announced last week, says Farm Europe’s group of experts from government and institutional organisations, companies , universities, media, businesses and commercial organizations.

Farm Europe pointed out that New Zealand tariffs are zero or very low, therefore the EU can already export to New Zealand duty free and will hardly increase its exports on the basis of an agreement commercial.

The EU already had a positive trade balance with New Zealand, mainly due to EU industrial goods exports.

But New Zealand has free trade agreements with China, Hong Kong, Singapore and Taiwan. The EU therefore cannot expect significant trade benefits from the new agreement.

In agriculture, only a few EU products are subject to a customs duty (of only 5%) entering New Zealand.

On the other hand, EU tariffs on agricultural imports are much higher. But New Zealand exporters already had access to the EU market for 75,000 tonnes of butter and 11,000 tonnes of cheese, and the political agreement on the trade deal now provides additional access for 15,000 tonnes of butter, 25,000 tons of cheese and 15,000 tons of powdered milk.

Most of New Zealand’s existing exports to the EU are agricultural products (which account for 80% of the country’s total exports). New Zealand is a large and competitive agricultural exporter.

In 2021, it exported 28 billion euros of dairy products, eggs, meat, fruits and nuts, wine and other agricultural products.

Only New Zealand can benefit, especially in the agricultural sector, concluded Farm Europe experts, including the European Commission’s former deputy director general for agriculture, João Pacheco.

The inevitable result of the FTA [free trade agreement] there would be more New Zealand exports of dairy, meat, wine, fruit etc. and no further EU gains in the New Zealand market.”

However, the European Commission has said that the trade deal with New Zealand creates new opportunities for European farmers and food producers, as it removes all tariffs on EU agri-food exports while protecting “sensitive” agricultural products from the EU by limiting imports at zero or low duty. Zeeland products.

This is the case for several dairy products, beef and sheep meat, ethanol and sweet corn from New Zealand. Therefore, New Zealand exports will not jeopardize the EU market through unlimited imports in sensitive sectors, the commission said.

For example, beef imports at zero or lower tariffs will represent only 0.15% of EU consumption.

The zero or lower tariff quotas negotiated for butter, cheese and milk powder from New Zealand represent 0.71%, 0.27% and 1.3% of EU consumption respectively.

Representing EU farmers and cooperatives, Copa and Cogeca recognized the high standards of consumer protection in New Zealand and the European Commission’s efforts to protect GIs (geographical indications that protect the names of products EU standards) and EU production standards.

But Copa and Cogeca have expressed serious concern about the cumulative impact of concessions granted by the EU to New Zealand.

Copa-Cogeca Secretary-General Pekka Pesonen said: “We recognize the commitments that the EU and New Zealand have agreed on integrating the principles of the Paris Agreement and sustainability into international commerce. However, we know that for key sectors such as dairy, sheep and beef production, this agreement is painful.

“Therefore, we call for proper management and control of tariff quotas on imports of agricultural products, in order to avoid market failure.”

The EU will allow a tariff quota of 10,000 tonnes of beef imports at a reduced duty of 7.5%, phased in over seven years from the entry into force of the trade agreement. It is limited to high-quality, grass-fed beef.

The EU is proposing a tariff quota of 38,000 tonnes of duty-free sheepmeat from New Zealand over seven years.

The EU will allow a tariff quota of 25,000 tonnes of cheese duty-free over seven years. At the same time, the EU would abolish the customs duty of €170.60 per tonne for two existing quotas totaling 6,031 t of cheese.

Access through TRQs will also be granted for high protein whey (zero duty on 3,500 t phased in over seven years), sweet corn (800 t zero duty); and ethanol (4000 t at zero duty).

A tariff quota of 15,000 tonnes of milk powder will be subject to an MFN (most favored nation) duty of 20%.

New Zealand currently has access to a quota of 47,177 t of butter at a tariff of 38%. For 21,000 t, the tariff will be gradually reduced to 5%. The EU will also allow imports under the new tariff quota of 15,000 t with the same progressively reduced duty.

The European Commission expects bilateral trade to increase by 30% as a result of the deal, with annual EU exports expected to increase by €4.5 million. EU investment in New Zealand could increase by 80%.

European Commission President Ursula von der Leyen said: “This new agreement between the EU and New Zealand comes at an important geopolitical moment. Democracies like ours work together and serve the people.

Once the agreement has been adopted by the Council of the EU, it can be submitted to the European Parliament for approval. If New Zealand also ratifies, then the agreement can enter into force.

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