Tuesday, 17 July 2018 08:55

EU FTA talks begin

Written by  Peter Burke
EU Trade Commissioner Cecilia Malstrom and NZ Trade Minister David Parker at the launch of FTA discussions last month. EU Trade Commissioner Cecilia Malstrom and NZ Trade Minister David Parker at the launch of FTA discussions last month.

New Zealand this week begins negotiating a free trade agreement (FTA) with the EU in Brussels, despite the chaos over Brexit in London.

Up to 20 NZ officials are at the EU headquarters to work on the details of an FTA, as formally launched a month ago in Wellington by the EU Trade Commissioner Cecilia Malmstrom and NZ Trade Minister David Parker. 

Their stated aim was a comprehensive 21st century FTA including, notably, a 50% increase in trade, higher wages for NZers and cuts in tariffs to benefit our producers.

Both Malstrom and Parker expressed delight that the talks were underway and waxed lyrical about what an FTA could do for both parties. However, Malstrom freely acknowledged that the negotiations will have their moments, especially on the issue of agriculture. 

Troublesome issues such as tariff rate quotas (TRQs) on meat, and geographical indication GIs will be on the agenda. Negotiators will likely deal with the easy issues at the start and leave the sticky problems until later. This week’s discussions are the first round; signing the deal is likely to take two years.

Both sides have prepared detailed papers and the general scope and framework of the talks have been known to both sets of officials for some months.

The next round will be held in NZ later in the year. 

Meanwhile, over the past week British Prime Minister Teresa May’s attempt to get her Cabinet to agree on an exit plan from the EU has turned into a political nightmare, with two high profile resignations and criticism of her leadership from the Tory backbench. 

Some commentators see it as the worst crisis in British politics since WWII. 

May has been seeking a ‘soft Brexit’ – code for ‘we can leave the EU but still enjoy many of the benefits of the EU Customs Union’. A key element in this is to get a ‘soft’ border between Northern Ireland (part of the UK) and the Irish Republic. 

The present proposal by May is similar to others put up and is seen by the EU negotiators unacceptable. 

“We will bend the EU’s rules for the sake of Ireland, but don’t think for a minute that we will unravel the single market for a departing UK,” the EU’s chief negotiator Michel Barnier said recently.

However, despite all the shenanigans in London, NZ trade officials don’t believe this will interfere in any way with our FTA negotiations in Brussels this week. EU Trade Commissioner Cecilia Malmstrom gave a similar guarantee in Wellington recently.

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