FTA with EU a top trade priority

TRADING PLACES: Foreign Affairs and Trade principal adviser Mark Trainor at a presentation to update Gisborne businesses on Free Trade Agreement negotiations. Picture by Paul Rickard

New Zealand diplomats are working to ensure Gisborne cheese and manuka honey are not left out of a potential multibillion-dollar free trade agreement with the European Union, and are urging other businesses and Maori interests here to have a say in what they want to see.

Speaking to the Gisborne Chamber of Commerce, New Zealand Foreign Affairs and Trade principal adviser Mark Trainor said it was one of the Government’s “top trade priorities” to conclude a free trade agreement (FTA) with the European Union.

“That reflects not only because it’s an important economic trading relationship for New Zealand, but also the wider breadth and depth of relationships we have with all the EU member countries.”

Mr Trainor pointed out the EU was New Zealand’s third largest two-way trading partner, worth $23 billion last year, which made up about 14 percent of the nation’s total trade.

“Even if you take out the UK, you are still looking at $15 billion of two-way trade, so it’s very significant.

“It’s also the world’s biggest single market.

“What’s important for us, is New Zealand is one of only six WTO members that does not have an existing FTA with the EU, or until very recently, a negotiation launched to get an FTA. So that meant New Zealand exporters were facing quite significant competitive disadvantages, because product coming from other suppliers was trading on preferential terms that we didn’t have.”

Negotiations for an FTA were officially launched in June last year, after nine years of preliminary discussions.

Although there were differences of opinion on agricultural trade between New Zealand and the EU, in many other ways both had “like-minded” approaches to international trade.

“In particular, both New Zealand and the EU are heavily committed to a rules-based trading system. We also consider that the EU shares New Zealand’s commitment to what we would call a ‘progressive’ trade policy. That agenda comes under what’s known by the Government as ‘Trade for All’. Pursuing that Trade for All progressive trade agenda with the EU, we want to set a new benchmark for provisions relating to things like sustainable economic growth — including our objectives under climate change agreements.”

New Zealand was “exploring” with the EU how far those sustainable economic growth and climate change issues would reach.

“We will also be exploring with the EU how the trade aspirations of Maori can be supported by that FTA, and also consistent with the priorities of the Government will be to see how that FTA can help the interests of women, small and medium enterprises and, very importantly for Gisborne, the regions.

“All four of those are priorities for the Government at the moment.”

Provisions for the FTA to also recognise the rights and aspirations of Maori were also under discussion.

“To be frank, it’s hard going. The EU sees no scope for an indigenous to indigenous relationship, in the context of this FTA, but we are seeking to convince them otherwise.”

Mr Trainor emphasised that negotiators would not agree to any deal that was not in New Zealand’s national interest.

There would be no investor-state dispute clause in the FTA, which was a controversial aspect of other FTAs. Nor would there be any challenge to including in the agreement provisions to safeguard how New Zealand protected its environment or the Treaty of Waitangi.

“The EU is also clear on this point.”

Issues around intellectual property were also being negotiated, including “geographical indications” — terms which are associated with the locale of a specific product, like Champagne.

“It’s a major EU interest. For them it’s not only attached to wines but also to some foods. The EU is seeking protection under this FTA for about 2100 names, most of them are wine.

“We already have legislated protection for wine and spirits geographic indicators, but not for food.”

This was particularly an issue for particular cheeses, such as feta.

“In the meantime we have sought input from New Zealanders on the list of geographic indicators the EU wants to protect. We have also sought input on geographic indicators that New Zealanders want to propose.”

At present manuka honey would not be eligible because it would first need a Certification Trademark in New Zealand.

“That has to be sorted first.”

It was hoped negotiations would be completed by the end of the year, possibly after the United Kingdom’s October 31 Brexit deadline to leave the EU.

“From the Government’s point of view, we have been doing all we can to promote continuity and stability for New Zealand exporters through the Brexit period.”

A major area of concern for this country around Brexit were proposals for the UK and EU to split WTO tariff quotas.

“At the moment exporters can choose any of the 28 European markets to export to.”

A split in the quotas, however, would remove flexibility for exporters, and restrict their ability to react to fluctuations in market demand.

New Zealand was working to protect the access that exporters had now.

“We continue to press both the EU and the UK to follow through on assurances they have given both to us and to other WTO members who face a similar challenge, that we will not be left worse off as a result of Brexit.”

Mr Trainor added exporters should also use the Tariff Finder website (https://www.tariff-finder.govt.nz/), which enabled businesses to see tariff rates in 20 different markets where there was already an FTA with New Zealand, as well as 136 other markets.

“We want to make sure as many businesses as possible are getting the benefits that we have negotiated, so we maximise the uptake of those benefits. We are also really conscious that for business, non-tariff barriers are a really significant factor.”

If any business had experienced a barrier to export they could go to the tradebarriers.govt.nz website and advise the government about what barriers were an issue.

Activate Tairawhiti economic development general manager Steve Breen welcomed the effort to agree a trade deal with the European Union.

“A successful EU FTA would give us certainty of access to a wealthy and significant market for our products and services. In turn this would give our producers more confidence to invest in sustainable business practices to service this market,” said Mr Breen.

“Our primary sector is our key strength, so maintaining and enhancing access for our primary products is important — as well as IP protection, access for tourism and technology-based businesses.

“While FTAs take time to negotiate, they are critical for securing access to high-value export markets that our businesses can compete in. This is especially relevant given the uncertainty being generated by the current US-China trade tariff standoff.”

New Zealand diplomats are working to ensure Gisborne cheese and manuka honey are not left out of a potential multibillion-dollar free trade agreement with the European Union, and are urging other businesses and Maori interests here to have a say in what they want to see.

Speaking to the Gisborne Chamber of Commerce, New Zealand Foreign Affairs and Trade principal adviser Mark Trainor said it was one of the Government’s “top trade priorities” to conclude a free trade agreement (FTA) with the European Union.

“That reflects not only because it’s an important economic trading relationship for New Zealand, but also the wider breadth and depth of relationships we have with all the EU member countries.”

Mr Trainor pointed out the EU was New Zealand’s third largest two-way trading partner, worth $23 billion last year, which made up about 14 percent of the nation’s total trade.

“Even if you take out the UK, you are still looking at $15 billion of two-way trade, so it’s very significant.

“It’s also the world’s biggest single market.

“What’s important for us, is New Zealand is one of only six WTO members that does not have an existing FTA with the EU, or until very recently, a negotiation launched to get an FTA. So that meant New Zealand exporters were facing quite significant competitive disadvantages, because product coming from other suppliers was trading on preferential terms that we didn’t have.”

Negotiations for an FTA were officially launched in June last year, after nine years of preliminary discussions.

Although there were differences of opinion on agricultural trade between New Zealand and the EU, in many other ways both had “like-minded” approaches to international trade.

“In particular, both New Zealand and the EU are heavily committed to a rules-based trading system. We also consider that the EU shares New Zealand’s commitment to what we would call a ‘progressive’ trade policy. That agenda comes under what’s known by the Government as ‘Trade for All’. Pursuing that Trade for All progressive trade agenda with the EU, we want to set a new benchmark for provisions relating to things like sustainable economic growth — including our objectives under climate change agreements.”

New Zealand was “exploring” with the EU how far those sustainable economic growth and climate change issues would reach.

“We will also be exploring with the EU how the trade aspirations of Maori can be supported by that FTA, and also consistent with the priorities of the Government will be to see how that FTA can help the interests of women, small and medium enterprises and, very importantly for Gisborne, the regions.

“All four of those are priorities for the Government at the moment.”

Provisions for the FTA to also recognise the rights and aspirations of Maori were also under discussion.

“To be frank, it’s hard going. The EU sees no scope for an indigenous to indigenous relationship, in the context of this FTA, but we are seeking to convince them otherwise.”

Mr Trainor emphasised that negotiators would not agree to any deal that was not in New Zealand’s national interest.

There would be no investor-state dispute clause in the FTA, which was a controversial aspect of other FTAs. Nor would there be any challenge to including in the agreement provisions to safeguard how New Zealand protected its environment or the Treaty of Waitangi.

“The EU is also clear on this point.”

Issues around intellectual property were also being negotiated, including “geographical indications” — terms which are associated with the locale of a specific product, like Champagne.

“It’s a major EU interest. For them it’s not only attached to wines but also to some foods. The EU is seeking protection under this FTA for about 2100 names, most of them are wine.

“We already have legislated protection for wine and spirits geographic indicators, but not for food.”

This was particularly an issue for particular cheeses, such as feta.

“In the meantime we have sought input from New Zealanders on the list of geographic indicators the EU wants to protect. We have also sought input on geographic indicators that New Zealanders want to propose.”

At present manuka honey would not be eligible because it would first need a Certification Trademark in New Zealand.

“That has to be sorted first.”

It was hoped negotiations would be completed by the end of the year, possibly after the United Kingdom’s October 31 Brexit deadline to leave the EU.

“From the Government’s point of view, we have been doing all we can to promote continuity and stability for New Zealand exporters through the Brexit period.”

A major area of concern for this country around Brexit were proposals for the UK and EU to split WTO tariff quotas.

“At the moment exporters can choose any of the 28 European markets to export to.”

A split in the quotas, however, would remove flexibility for exporters, and restrict their ability to react to fluctuations in market demand.

New Zealand was working to protect the access that exporters had now.

“We continue to press both the EU and the UK to follow through on assurances they have given both to us and to other WTO members who face a similar challenge, that we will not be left worse off as a result of Brexit.”

Mr Trainor added exporters should also use the Tariff Finder website (https://www.tariff-finder.govt.nz/), which enabled businesses to see tariff rates in 20 different markets where there was already an FTA with New Zealand, as well as 136 other markets.

“We want to make sure as many businesses as possible are getting the benefits that we have negotiated, so we maximise the uptake of those benefits. We are also really conscious that for business, non-tariff barriers are a really significant factor.”

If any business had experienced a barrier to export they could go to the tradebarriers.govt.nz website and advise the government about what barriers were an issue.

Activate Tairawhiti economic development general manager Steve Breen welcomed the effort to agree a trade deal with the European Union.

“A successful EU FTA would give us certainty of access to a wealthy and significant market for our products and services. In turn this would give our producers more confidence to invest in sustainable business practices to service this market,” said Mr Breen.

“Our primary sector is our key strength, so maintaining and enhancing access for our primary products is important — as well as IP protection, access for tourism and technology-based businesses.

“While FTAs take time to negotiate, they are critical for securing access to high-value export markets that our businesses can compete in. This is especially relevant given the uncertainty being generated by the current US-China trade tariff standoff.”

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