Thursday, May 19, 2022

EU trade talks still tough going despite election result

The defeat of the protectionist candidate in France’s presidential elections was good news for New Zealand’s trade negotiations with the European Union, although big obstacles to getting a deal over the line still remain.

The defeat of the protectionist candidate in France’s presidential elections was good news for New Zealand’s trade negotiations with the European Union, although big obstacles to getting a deal over the line still remain.

It was thought a victory by Marine Le Pen, who could have sunk the EU’s current trade talks with agricultural exporting powerhouses Australia and NZ.

“The importation of agricultural products that have not been grown or produced the same way as in France will be prohibited,” one of Le Pen’s campaign pamphlets said.

Instead incumbent Emmanuel Macron won last week’s run-off election by a far more comfortable margin than had been predicted by opinion polls.

NZ’s negotiations for a free trade deal, attempting to break open Europe’s already heavily-protected markets for agricultural products, are into their fourth year.

The two sides recently concluded their 12th round of talks and despite progress in other areas, NZ’s negotiators say they are still to receive a meaningful market access offer from the EU for NZ’s largest agricultural exports of dairy, beef and sheep meat.

“As always, whenever someone is negotiating with NZ, one of the big challenges is going to be in the agricultural sector,” the Ministry of Foreign Affairs and Trade chief negotiator Vangelis Vitalis said in a briefing following the recent round of talks.

“That is always disappointing to us, but it is one of the realities that we face as a country that is very competitive in the agriculture area.”

He said the EU would have to do a lot better than its initial offer two years ago for a miniscule opening of the European cheese market to NZ exporters in particular if it wanted NZ to contemplate its demands for the exclusive use by its producers of cheese names associated with European places, known as Geographic Indications (GIs).

“We want to level the playing field – the focus that we place on these negotiations in horticulture is that not only does the tariff get eliminated, but that it gets eliminated as quickly as possible.”

Vangelis Vitalis

More encouraging were the offers for improved access for some horticultural products, and fish, although these would see tariffs being phased out over longer timeframes than NZ negotiators were currently willing to accept.

Currently kiwifruit exports to the EU face an 8.4% tariff, while Chile’s free trade deal with the EU a decade ago means they pay no tariff.

“We want to level the playing field – the focus that we place on these negotiations in horticulture is that not only does the tariff get eliminated, but that it gets eliminated as quickly as possible so that we eliminate the discrimination that we have been facing for a number of years as quickly as possible,” he said.

In the recently-concluded trade agreement with the United Kingdom, NZ negotiators were able to secure tariff-free access for dairy products within five years, and for beef and sheep meat within 15 years.

Vitalis said it was unlikely those terms would be replicated with the EU, with quotas likely to continue to restrict trade.

“I am not happy about it [but] the reality is the EU does not conclude trade agreements in that way,” he said.

“It leaves out dairy, beef and sheep meat in particular. Those are controlled and the quotas apply.

“We understand that [but] it does mean that it shapes the way we approach other issues.”

As well as pushing for protections for GIs, European negotiators had other demands in the areas of trade in services and digital trade.

He said Prime Minister Jacinda Ardern had recently spoken to the head of the European Commission Ursula von der Leyen.

Both sides had recommitted to finishing negotiations as soon as possible.

Vitalis will travel to international meetings with Trade Minister Damien O’Connor, where they will meet their EU counterparts later this month.

“I do expect I will be going to Europe before then to talk to my counterpart to talk about NZ’s priority to flush out the EU’s goods market access offer as soon as possible,” he said.

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