Monday, 11 March 2019 08:37

Reality bites for free trade with EU — Editorial

Written by 
Jacinda Ardern. Jacinda Ardern.

OPINION: The PM's unrealistic claim of a free trade agreement with the EU before the end of the year is proving to be a hollow promise. 

Prime Minister Jacinda Ardern’s claim, made after her much-hyped European visit earlier this year, that a completed free trade agreement (FTA) with the European Union (EU) by the end of this year was on the cards, is proving to be as hollow as most political promises.

Any proper analysis of the PM’s assertion at the time would have shown that her enthusiasm for such a deal was always more rhetoric than reality. It is clear that agriculture remains a sensitive issue and the recent visit to New Zealand by European Commissioner for Agriculture and Rural Development Phil Hogan has only highlighted this fact.

For one, the Brexit melee has identified a major issue over tariff rate quotas (TRQs) for our sheepmeat, beef and dairy products sent to the EU.

NZ has strongly rejected the EU and UK government’s proposal that upon Brexit the TRQs be split in half. As trade expert Stephen Jacobi points out, this poses huge difficulties for NZ exporters who manage, according to market trends and consumption patterns, flows of their products to the EU and to Britain.

However, both the EU and the UK have ignored NZ’s concerns – and the objections of other trading partners with similar arrangements – and now risk years of trade litigation at the WTO. This is hardly the sign of a trade partner willing to compromise.

Another issue underlined by Hogan’s visit is that the EU’s proposed restrictions on the use of geographical names – or geographic indicators (GIs) – on products will also have implications for NZ exports to other regions, including China. 

As part of negotiations for the FTA the EU wants NZ to abide by strict regulations on the way certain geographical names are used in international trade. This new strict regime would not only apply to products marketed in NZ, but also to our exports to other markets: think of feta cheese, mozzarella, parmesan, even cheddar.  NZ’s view is that these names have become generic rather than relating to a certain geographic region.

As Jacobi points out, Fonterra now supplies large amounts of mozzarella cheese to China: every second pizza in China is covered with it. That’s a lot of pizza and a lot of cheese.

It seems Ardern’s fanciful FTA claim is now hitting reality. If she or anyone believes a comprehensive FTA, including agriculture, with the EU will be completed by the end of this year, then we have a porcine aerodrome we can sell her.

More like this

Sorry, not sorry

OPINION: Did former PM Jacinda Ardern get fawning reviews for her book?

Tough trade

OPINION: Known for serious trade negotiations with global politicians, top NZ trade official Vangelis Vitalis also knows how to crack jokes.

Featured

Big return on a small investment

Managing director of Woolover Ltd, David Brown, has put a lot of effort into verifying what seems intuitive, that keeping newborn stock's core temperature stable pays dividends by helping them realise their full genetic potential.

Editorial: Sensible move

OPINION: The Government's decision to rule out changes to Fringe Benefit Tax (FBT) that would cost every farmer thousands of dollars annually, is sensible.

National

Machinery & Products

» Latest Print Issues Online

The Hound

Overbearing?

OPINION: Dust ups between rural media and PR types aren't unheard of but also aren't common, given part of the…

Foot-in-mouth

OPINION: The Hound hears from his canine pals in Southland that an individual's derogatory remarks on social media have left…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter