Background
Despite being one of New Zealand's biggest trade partners and investors, the EU does not have preferential trade arrangements with the country. Therefore, EU economic operators are in a less favourable position when accessing the New Zealand market than those from countries that already have an FTA with New Zealand. Bilateral trade flows in goods accounted for €7.4 billion in 2019, with an EU trade surplus of €2.7 billion, and bilateral trade in services was worth €3.8 billion in 2018, with an EU surplus of €1.1 billion.
New Zealand is a major producer and exporter of agricultural products. Agri-food trade is also significant in the country's trading relationship with the EU, representing 11.5 % of EU exports to and 67.1 % of EU imports from New Zealand in 2019, with a €0.9 billion deficit on the EU side. Therefore, agriculture is one of the key issues in the talks. The Council negotiating directives on an EU FTA with New Zealand envisage specific treatment for the most sensitive products, including longer transition periods or tariff-rate quotas for certain agricultural products, and state that green box payments should be recognised as non-trade-distortive. They also set the objective that the FTA should provide direct protection to EU geographical indications (GIs), based on a list of GIs including wines, spirits, agricultural products and foodstuffs.
On its part, New Zealand is pursuing its agricultural export interests in sectors such as dairy and meat, and links its improved access to EU markets to the issue of GIs. Given the importance of services trade and investment for bilateral trade relations, these sectors are also an important focus for both sides' negotiators. Other areas of interest to the EU include improved public procurement market access at all levels of government; less restrictive non-tariff measures; the inclusion of a specific chapter on small and medium-sized enterprises (SMEs), and provisions related to i) energy and raw materials (ERM), and ii) labour and environmental aspects of trade and sustainable development (TSD). In its summary of the initial negotiating objectives, the New Zealand Ministry of Foreign Affairs and Trade highlighted several issues to be discussed during the negotiations, including in areas such as trade in goods; services and investment; digital trade; movement of business people; trade remedies and technical barriers to trade (TBT); sanitary and phyto-sanitary (SPS) measures; intellectual property (IP); public procurement; and TSD.
In full: https://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_ATA(2020)659342
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