Friday, 06 October 2017 10:55

EU deal would benefit NZ and EU

Written by  Pam Tipa
NZIER’s John Balingall. NZIER’s John Balingall.

Modelling done by the European Community shows that its agriculture would be little affected by a free trade agreement with New Zealand, says John Ballingall of the New Zealand Institute of Economic Research.

The recently released economic modelling shows that a FTA between the EU and NZ would have positive outcomes for both parties, he told an Export NZ conference in Auckland last week.

“My concern was that some economic modelling would show that the European agricultural sector would get decimated by a flood of product coming from NZ. The modelling doesn’t show that at all; it shows tiny, tiny impacts on the EU agricultural sector. That is going to be very helpful to us as we go to negotiate.”

In terms of the leverage NZ has, EU companies want better access to the Asia Pacific, he says. “They know that [region] is a real engine of growth in the global economy.”

“By signing trade agreements with NZ, which has trade agreements with Asia Pacific – or hopefully will if TPP and the RCEP (regional comprehensive economic partnership) go ahead -- they get to link into those supply chains a lot better.”

National trade spokesman Todd McClay says all the EU member states say they support the launch and conclusion of an FTA with NZ.

A small group say there will be some difficult issues to work through.

“Ironically because of what has happened in the US there is a greater chance we will get it done in that two to three year period….

“They want to send a very clear signal that they want to stand up for free trade… and they want to move ahead and push forward.”

But McClay said if he remained trade minister he would not be willing to do a quick deal at the expense of a good deal.

Asked what were the chances of getting a good deal for the agricultural sector, he said it will be a challenge. But he thinks the EU has an opportunity to do something with NZ that it has not done before – a high quality, modern deal that delivers for companies large and small.

“But ultimately we will be wanting better access for agriculture into the EU market,” he says. “How we go with that will depend on a number of other things and I think it will be a very carefully balanced negotiation; but agriculture is going to be a very big challenge.”

Trade expert Charles Finny says there were very strong strategic reasons for EU to want to negotiate a high quality and relatively quick deal with NZ. In the negotiations with EU and Japan a lot of problems were solved very quickly.

“I think with us, similar factors will be in play… we have an advantage over the Australians in that some of the most difficult issues potentially between NZ and Europe have already been resolved through negotiations in the WTO.” For example, existing quota agreements could be expanded.

McClay says the worst thing for NZ would be for the whole agreement to have to go to individual EU parliaments because of agricultural issues.

He is confident we can negotiate a high quality deal in a relatively good time.

He prefers not to put a one to two year timeline on it but thinks it should be doable in three years.

 

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