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Vive le NZ bifteck! EU-NZ negotiations start in June

News that trade negotiations will begin between New Zealand and the European Union, the country's third-largest trading partner, has been well received by local business chiefs.

The agreement to start negotiations represents a significant milestone for the sector in the face of growing protectionist rhetoric worldwide, says Beef + Lamb New Zealand chief executive Sam McIvor. "The FTA [free trade agreement] will create a stable and level playing field which is crucial to the growth and future prosperity of the sheep and beef sector and New Zealand as a whole."

New Zealand pays approximately $53 million in tariffs per year on its red meat exports to the EU, McIvor says.

The Council of the European Union authorised the opening of talks with New Zealand and Australia overnight and EU Trade Commissioner Cecilia Malmström will travel to New Zealand in June for the formal launch of negotiations.

European Commission president Jean-Claude Juncker says the Australasian negotiations are the latest in a series for the Europeans. "These agreements will build on the recent successful agreements with Canada, Japan, Singapore, Vietnam, as well as Mexico among others, expanding the alliance of partners committed to open and rules-based global trade."

The European Union is an important market for New Zealand red meat products, with over $1.8 billion-worth sent there in 2017.

Two-way trade between New Zealand and the EU is worth more than $20 billion a year. "Even excluding the UK, our trade with the EU is worth about $16 billion annually, Trade and Export Growth Minister David Parker said.

McIvor says the European Union is an important market for New Zealand red meat products, with over $1.8 billion-worth sent there in 2017. It is New Zealand’s largest market by region for sheepmeat exports and second-largest for wool and chilled beef exports.

Meat Industry Association chief executive Tim Ritchie says New Zealand faces significant tariff and non-tariff barriers into this market, including the approximately $53 million on red meat exports.

A successful NZ-EU free trade agreement would generate new opportunities for agricultural and food producers, he says.



ExportNZ executive director Catherine Beard is also upbeat. Having competitive access into such a big trade bloc would be a huge boost for New Zealand exporters, she says. "We still face significant tariffs on many of our agricultural exports in European markets, which reduce our competitiveness in those markets."

EU Trade Commissioner Cecilia Malmström says trade negotiations are a win-win. "They create new opportunities for our businesses, as well as safeguarding high standards in key areas such as sustainable development," she says.

According to the EU, having trade agreements with Australia and New Zealand would provide EU businesses with a valuable entry point into the wider Asia-Pacific region. They will also put European companies on an equal footing with those from the other countries in the area that have signed up to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or that already enjoy better access to Australia and New Zealand through other preferential trade agreements.

The first rounds of talks is set down for July in Brussels. The Ministry of Foreign Affairs and Trade estimates negotiations could take two to three years.