In a groundbreaking development for New Zealand's agricultural sector, the government has announced a new Free Trade Agreement (FTA) with the European Union (EU). The agreement is set to generate substantial economic gains for the country, with exports to the EU expected to reach up to $1.8 billion annually by 2035.
Under the FTA, the removal of duties on 91% of New Zealand's goods exports to the EU will be effective immediately, rising to an impressive 97% within seven years. These tariff savings will amount to $100 million per year from the off, representing the highest immediate tariff savings achieved through any New Zealand FTA.
Notably, products like kiwifruit, Mānuka honey, fish and seafood, onions, wine, and industrial goods will no longer face tariffs, ensuring enhanced market access and profitability for rural producers.
The FTA also introduces significant new quota access for key agricultural products, such as beef, sheep meat, butter, and cheese. If fully utilized, these quotas could be worth hundreds of millions of dollars each year. This represents a significant opportunity for rural communities to expand their trade and bolster their post-COVID recovery efforts.
The FTA's focus on sustainability aligns well with New Zealand's values and commitment to high labour, environmental, and animal welfare standards. It also encompasses areas such as climate change, labour rights, women's economic empowerment, and environmentally harmful practices. By staying on a path of lower emissions, New Zealand aims to secure high-quality trade deals that benefit its economy.
Furthermore, the FTA includes a dedicated Māori Trade and Economic Cooperation chapter, enabling greater engagement between New Zealand and the EU on Māori economic and trade interests, highlighting the government's commitment to fostering inclusive and diverse partnerships.
The NZ-EU FTA is anticipated to come into force in the first half of 2024, pending the completion of necessary legal procedures. Rural communities can look forward to increased market access, reduced tariffs, and potential growth opportunities across various sectors, fostering economic resilience and prosperity for New Zealand's heartland.