Changing global trade ties
OPINION: I recently returned from a market visit overseas, including the United Kingdom and Europe. These are critical, historically important and increasingly high value markets for our red meat exports.
In an exclusive interview with Rural News, Nina Obermeier says the offer put to NZ in the negotiations was the best the EU could make. She says the deal creates $600 million in additional quota access for NZ and claims the agreement is "modern and ambitious".
"We heard that NZ might have wanted even more market access but what we have done is a significant marketing opening from our side. It was clear right from the start that these issues around agriculture were a very sensitive issue to the EU economy as well."
Obermaier was with Prime Minister Jacinda Ardern and Trade Minister Damien O'Connor as the talks were being finalised in Brussels. She says the signing of the deal was like a ray of light in some very dark times.
According to Obermaier, the negotiations went down to the wire - true to form - the NZ negotiating team put up a decent fight right to the end. She says it was the right time to conclude the negotiations and is not sure delaying the talks would have produced a better result.
"Rather the contrary, I think," she told Rural News.
Obermaier says the deal opens up lots of new trading opportunities for companies and farmers on both sides.
"91% of all NZ exports will be duty free as of day one and we are expecting a 30% increase in our trade, but we have done more than that," she adds.
"We have got the first chapter on sustainable food systems which means we will be working together for example on animal welfare and on the reduction of use of pesticides. Of special significance is that we have got the first ever agreement where we have enforcable provisions on the Paris climate agreement."
Obermaier says also of special significance is an agreement to create opportunities for a burgeoning Maori economy. She says the agreement goes beyond just trade and gives a clear signal at a geographical level that two democracies can deliver such a quality agreement when values are being challenged by such events as the Russian invasion of Ukraine.
She says the FTA will also open up new opportunities for partnerships and actvities between the two jurisdictions. She points to agricultural research and climate change as two examples.
Now that the negotiations have been concluded, the process of ratifying the deal will now begin in both the EU and in NZ. After the original texts have been 'legally scrubbed' it will eventually go to the European parliament for final sign-off. This could take at least a year.
Beef
Before: FTA 1,102 tonnes - 20% tariff.
Now: 10,000 tonnes - 7.5% tariff.
Sheepmeat
Before: 125,000 tonnes.
Now: 163,000 tonnes (NZ is the only country apart from Australia, which has a sheepmeat quota to the EU and Australia's is 20,000 tonnes).
Butter
Before: 47,177 tonnes and a tariff rate of 700 Euros per tonne (this made butter exports to the EU virtually impossible because of the high tariff rate).
Now: 21,000 tonnes at 95 Euros per tonne - an 86% cut in the tariff and an additional 15,000 new tonnes of access, also at 95 Euros a tonne and a further 14,000 tonnes where the tariff is cut to 569 Euros a tonne.
Cheese
Before: 6031 tonnes with a tariff rate of 170.60 Euros per tonne (this has made it prohibitive to sell any cheese to the EU in the last five years).
Now: 31,000 tonnes with a zero tariff from day one of the agreement (NZ is the only country with cheese access to the EU).
Details of the FTA
On the face of it, the big winners of the EU FTA are kiwifruit, wine, onions and seafood.
Vangelis Vitalis, who headed the NZ negotiating team, told the Primary Industry Summit that we got the best possible deal and if we'd not signed now, NZ would have gone to the back of the queue.
He shares the frustrations of both the dairy and meat sectors but pointed out NZ was dealing with the most protectionist agricultural trading block in the world and says they operate on a different paradigm to NZ.
The EU's desire to protect its agricultural sector dates back to the end of WWII when there were massive food shortages in Europe and thousands of ordinary people died of starvation - 45,000 in the Netherlands alone.
To that end the concept of food sovereignty became embedded in the Treaty of Rome, the founding documet of the original EEC back in 1956, and still exists today.
The farming lobbies in the EU countries are extremely powerful and are highly influential in determining which political party wins an election.
While there is understandable concern in the dairy and beef sector, it's worth stating a few facts.
