The EU-New Zealand Free Trade Agreement and New Zealand Produce Industry

18th July 2023

The EU-New Zealand Free Trade Agreement and New Zealand Produce Industry

After years of negotiations, New Zealand and the EU have finally signed a Free Trade Agreement in recent weeks. This agreement is expected to open new avenues for trade as well as strengthening existing ones.

Many current tariffs will be removed, with an immediate elimination of tariffs for kiwifruit, onions, apples, and other horticultural products. More than 91% of currents tariffs will be removed the day the Free Trade Agreement comes into place, with 97% of New Zealand’s exports to the EU becoming duty-free eventually.

Article 19 of the EU-New Zealand Free Trade Agreement covers Trade and Sustainable Development, the first EU trade agreement to do so. This article sets objectives to be mutually achieved on issues such as climate change and social justice. Part of this agreement involves both countries committing to implementing the United Nations Framework Convention on Climate Change and the Paris Climate Agreement. The observance of these commitments are subject to trade sanctions in the case of material breaches.

Zespri, for example, welcomes the Free Trade Agreement and its removal of tariffs on New Zealand kiwifruit export. In a statement they explain “The FTA will set us up to expand our exports to Europe, providing more European consumers with the highest-quality Zespri Kiwifruit and helping deliver strong returns for our growers.”

The EU has also been working on a number of their own sustainability and social justice strategies that shape the future of their requirements in these areas.

The Green Deal is the European Union’s new sustainable and inclusive growth strategy. It covers a wide range of strategies and regulations that aim primarily to achieve net zero carbon emissions by 2050.

It is the overarching plan that brings together many other EU initiatives such as the Farm to Fork Strategy and Biodiversity Strategy, as well the Circular Economy Action Plan, Sustainable Growth Strategy, Industrial Strategy, Energy System Integration Strategy, Mobility Strategy, and more.

At present, the Green Deal environmental standards DO NOT appear to apply to New Zealand exports.

However, EU health and safety rules will still apply to New Zealand exports, such as maximum pesticide levels.

An EU factsheet on this topic states:

“EU health and food safety rules apply to all products sold in the EU, whether produced domestically or imported. These are not negotiable, this deal does not affect these rules whatsoever. This includes GMO [genetically modified organisms] rules and maximum residue levels for pesticides”

In addition, the EU plans to cooperate with ‘third countries’ such as New Zealand to promote global efforts on these issues. This may mean more requirements for exports are added in future.

While the Green Deal targets products and behaviours within the EU, it is insightful to see what standards a large trading block and customer of New Zealand is adopting, as they interpret and implement the United Nations Framework Convention on Climate Change and the Paris Climate Agreement in their own rules. Such regulations could, in future, potentially be applied to trade with countries such as New Zealand.

Green Deal key targets most relevant to the EU produce industry include:

• Reduce by 50% the use and risk of chemical pesticides by 2030.

• Reduce by 50% the use of more hazardous pesticides by 2030.

• Reduce nutrient losses by at least 50%, while ensuring no deterioration on soil fertility.

• Reduce fertilizer use by at least 20% by 2030.

• Boost the development of EU organic farming area with the aim to achieve 25% of total farmland under organic farming by 2030.

• High-diversity landscape features: 10% of UAA [utilised agricultural area] Further related actions and supportive policies from the EU Farm to Fork Strategy include:

• Organic action plan

• Animal welfare legislation

• New genomic techniques

• Carbon farming initiative

• Biopesticides

• Feed additives

• Broadband target

• Integrated nutrient management plan

• EU import standards

• Halving food loss and waste by 2030

• Contingency plan

• Preventing food fraud

• EU code of conduct for responsible business and marketing

• practices

• Strengthening of farmers’ position in the food supply chain

• Sustainable food procurement

• Promotion of sustainable food consumption

• Taxation to incentivise sustainable food consumption

• Food labelling to support healthy and sustainable choices

  The Free Trade Agreement is not expected to come into force this year, as it will have to be ratified by parliament. No firm date has been announced.