EU-New Zealand: A Trade Agreement with Environmental and Social Concerns

On June 30th 2022, the European Union (EU) and New Zealand finalized the negotiations aimed at entering into a trade agreement between both parties. According to Jacinda Ardern, New Zealand’s prime minister, it took 14 years to finally see this agreement materialize since it was first proposed. Officially, the negotiations started on June 2018 and extended over the course of four years and 12 negotiation rounds.

Despite geographical distance between these two regions, the numbers concerning trade between both parties are relevant:

  • The European Union is New Zealand’s third-biggest trade partner;
  • Bilateral trade has increased gradually in the past few years, totalizing 7.8 billion euros in goods (2021) and 3.7 billion euros in services (2020).

If the pre-agreement figures are already significant, with the conclusion of the agreement they are expected to grow by 30%, with EU exports potentially increasing by 4.5 billion euros.

Tariffs Elimination

This growth will be due, partially, to the trade liberalization and the resulting elimination of tariffs on goods and services that could save businesses 140 million euros annually and increase investment flows between the EU and New Zealand by 80%.

Despite the elimination of tariffs, there are certain products from the EU that will be protected, particularly wine and spirit drinks (the list includes around 2000 denominations). Additionally, 163 of the most renowned EU food GIs (GI- Geographical Indications) such as Asiago, Feta, Comté or Queso Manchego cheeses, Istarski pršut ham, Lübecker Marzipan, Elia Kalamatas olives will be protected in New Zealand.

Concerning sensitive products such as beef meat and dairy product, for example, they can be imported from New Zealand but, in order to protect the interests of the EU producers, the amounts will be limited.

A Pioneer Agreement on Social and Sustainability Matters

The agreement devotes an entire chapter to sustainable development that covers a series of issues not only related to the Paris Agreement, but also labor issues. The agreement will provide the possibility of trade sanctions, as a measure of last resort, in case of non-compliance with the Paris Agreement standards or those defined by the International Label Organization (ILO).

For the first time, the agreement will include a chapter about sustainable food systems, an article concerning trade and gender equality and a specific provision on trade and fossil fuel subsidies reform. As soon as the agreements enters into force, the ecological goods and services will be liberalized.

European Commission President, Ursula von der Leyen, said “This trade agreement brings major opportunities for our companies, our farmers and our consumers, on both sides.”

On the other hand, Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis affirms “This is a new generation of trade deal, with both sides set to make real economic and environmental gains.”

Future – The Steps to Entry into Force

The negotiations may be over, however the agreement has yet to enter into force. The next step includes reviewing the texts (legal revision) and translating them to all official EU languages. Once this step is finished, the European Commission will be able to submit the agreement to the Council for signature and conclusion. Once adopted by the Council, the EU and New Zealand sign the agreement. Following the signature, the text is transmitted to the European Parliament for consent. After the consent by the Parliament, and once the Council decides to conclude the agreement and New Zealand also ratified it, the agreement can enter into force.


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