New Zealand Free Trade Agreement with EU: What You Need to Know
The European Union is New Zealand`s third-largest trading partner after Australia and China. In 2019, the trade volume between the two groups amounted to almost NZD 20 billion. Negotiations for a free trade agreement began in 2018, and after several rounds of talks, the two sides announced the conclusion of their negotiations in June 2019. This article will discuss the implications of the agreement and the benefits it offers to the two regions.
What is the Free Trade Agreement?
The New Zealand free trade agreement with EU aims to remove tariffs on goods and services traded between the two regions. The agreement will also remove non-tariff barriers, allowing businesses to operate more freely between the two regions. Moreover, the agreement will ensure that intellectual property rights are respected, and both parties will have access to each other`s government procurement markets.
The Benefits to New Zealand
The free trade agreement with the EU creates significant opportunities for New Zealand exporters. For example, the agreement will eliminate tariffs on almost all goods traded between the EU and New Zealand. As a result, New Zealand producers will be able to export products such as wine, beef, and dairy products to the EU at more competitive prices. Additionally, New Zealand companies will have better access to the EU`s government procurement markets, which will provide them with significant opportunities to grow their businesses.
The Benefits to the EU
The free trade agreement with New Zealand is also beneficial to the EU. Firstly, the agreement will provide EU companies with better access to the New Zealand market. It will remove trade barriers and open up new opportunities for EU exporters in various sectors, including machinery, pharmaceuticals, and transport equipment. Secondly, the agreement will create a level playing field for EU companies operating in New Zealand. This will ensure that they are treated equally to local companies and will be able to compete on an equal footing.
The Impact on Consumers
Consumers are among the biggest beneficiaries of the free trade agreement between New Zealand and the EU. The agreement will increase competition, which will lead to lower prices and more choice for consumers. As tariffs are eliminated, the cost of goods traded between the two regions will go down, and this will be passed on to consumers. Moreover, the removal of non-tariff barriers will also benefit consumers as it will allow for the easier movement of goods between the two regions.
Conclusion
The New Zealand free trade agreement with EU is a significant development that will create opportunities for businesses on both sides of the agreement. New Zealand exporters will now have better access to the EU`s markets, and EU exporters will have better access to the New Zealand market. Additionally, the removal of tariffs and non-tariff barriers will benefit consumers in both regions. The agreement will help to create a level playing field, allowing for fair competition between companies in both regions. The agreement needs to be ratified by both parties, and once it is fully implemented, it will create a brighter future for businesses and consumers in New Zealand and the EU.