Shared interests and values
New Zealand has longstanding historical, cultural, political and economic ties with the European Union. These are the foundation for our modern relationship.
We share a deep commitment to democracy, respect for human rights, and the rule of law. We are both committed to institutions such as the United Nations and World Trade Organization, which have helped to foster international rules and cooperation for decades.
Our sense of international citizenship sees us working together on many global issues including development in the Pacific, climate change, scientific collaborations, and international security threats like terrorism and cyber-crime.
Many New Zealanders have whakapapa (ancestry) connections to Member States of the European Union. Our young people keep up a contemporary connection through study, travel and working holiday schemes with many European Union countries.
In 2016, New Zealand and the European Union signed a Partnership Agreement for Relations and Cooperation (PARC), to strengthen political dialogue and cooperation on issues of mutual interests such as economic and trade matters, science and innovation, education and culture.
New Zealand and the European Union have agreed a “Māori Trade and Cooperation” chapter in the FTA that will provide a valuable new platform to advance Māori economic aspirations in the EU.
Benefits for exporters
Goods
The EU is New Zealand’s 4th largest trading partner, with two-way trade in goods and services worth NZ$20.2 billion in 2022. It is one of New Zealand’s most important markets, with close to 450 million high-income consumers.
New Zealand goods exports to the EU incurred estimated tariff duties of NZ$115 million per annum in the period 2017-2019 (i.e. pre-COVID 19). Tariff savings will have increased somewhat since that time because there has been a 4.6% increase in EU goods imports from New Zealand over the subsequent three-year period (i.e. 2020-2022).
Under the FTA:
- 91% of New Zealand’s current goods trade to the EU will enter duty free from day one, rising to 97% after seven years; and
- Estimated tariff savings of $100 million from day one, rising to $110 million after seven years.
- The FTA will also open up valuable additional quota access for key products of export interest to New Zealand, including for beef and dairy.
Services
The FTA also contains high standards, rules and commitments to support the growth and development of trade in services between New Zealand and the EU. Prior to the pandemic the EU was New Zealand’s 4th biggest market for services exports, with exports worth $1.87 billion in the year to March 2020. Covid-19 did see a substantial dip in the value of services exports to the EU to $760 million. The Agreement includes improved commitments to help facilitate and provide certainty for services exporters, and ensure that services trade bounces back quickly.
Services market access commitments contained in the agreement build significantly on commitments made in the WTO General Agreement on Trade in Services and follow the ‘negative listing’ approach, which provides for greater clarity and transparency of commitments.
Among the sectors in which the Agreement will deliver improved access for New Zealand services exporters are private education services and certain professional services, including legal services. The EU and New Zealand have also agreed to include commitments on a broader range of aviation services, including ground handling services and services such as aerial fire-fighting, flight training, aerial spraying and other airborne agricultural, industrial and inspection services.
In the movement of business persons section, the NZ-EU FTA significantly eases the regulatory process to secure visas for New Zealand firms seeking to provide professional services on a contractual basis, including engineering, legal services, and environmental services.
Benefits for small and medium businesses
The FTA will create opportunities for New Zealand businesses large and small to grow, invest and diversify, and support New Zealand’s economic recovery from the pandemic. The agreement will cut costs and red tape for New Zealand exporters, allowing them to compete on a level playing field in the EU.
Trade for all
The FTA also delivers on the Government’s Trade for All objectives in helping to ensure our trade policy benefits all New Zealanders, contributing to increased well-being and sustainability. The FTA contains commitments to support social, economic and environmental objectives, and the partnership with Māori under te Titiri o Waitangi/the Treaty of Waitangi. As a result, the FTA will lay the foundations for even stronger and more inclusive connection between the European Union and NZ in the future, including through the involvement of officials, academics, representatives of Māori organisations, business and civil society.
The Agreement contains precedent-setting commitments for sustainable development including on climate change, gender, and labour, as well as a first-of-its-kind cooperation chapter aimed at improving the sustainability of our respective food systems.
Protecting rights
The NZ-EU FTA preserves the unique status of the Treaty of Waitangi. The EU recognised the importance of this to New Zealand, and agreed to the inclusion of a Treaty of Waitangi exception to ensure the government can meet its obligations to Māori. This provision is consistent with all of New Zealand’s recent FTAs.
Also in line with previous free trade agreements, the FTA includes general exceptions and specific reservations to preserve the Government's right to regulate and ensure public provision in areas such as health, education, labour, environment, water, culture and heritage and other areas that are important to New Zealanders.
In line with New Zealand policy, Investor State Dispute Settlement (ISDS) and investment protection provisions are not included in the FTA.