Wednesday, April 24, 2024

EU trade talks make headway

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Trade Minister Damien O’Connor is expecting a new agricultural market access offer from the European Union to land in his inbox within the next few weeks. Talks with the EU for a free trade deal have been stuck in first gear for over a year, largely due to the poor state of the offer from the Europeans on market access for New Zealand’s agricultural exporters.
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O’Connor recently returned from talks with his counterpart in Brussels to try and break the impasse.

Speaking to Farmers Weekly from his Auckland MIQ facility on Friday, O’Connor said the talks with EU trade commissioner Valdis Dombrovskis pointed to progress ahead.

“The discussions we had with both the trade and agricultural commissioners in Brussels were cordial, engaging and useful,” O’Connor said.

He says officials were back at the negotiating table last week, although agricultural market access was not part of the detail being worked through in the current negotiating round.

“In the most sensitive areas we have not received an offer as yet, but we hope to do so after the [Northern Hemisphere] summer break,” he said.

O’Connor says he was happy with the progress being made in other areas of the negotiation and was hopeful his recent discussions with Dombrovskis would spur the Europeans into making a more credible offer on agricultural market access for NZ exporters.

The last time details of the EU’s agricultural market access offer to NZ were made public was in the middle of last year.

At the time, former Trade Minister David Parker lambasted the offer from the Europeans to open up a mere 0.02% of its domestic cheese market and 0.03% of its butter market as “paltry”.

Asked if he had any inkling of how much of an improvement on the EU’s earlier offer could be expected, O’Connor wasn’t making any comment.

“We had positive indications but clearly these are technical and challenging areas, but the positive indications that we received from Dombrovskis have flowed through into negotiations and that is encouraging,” he said.

O’Connor says its diverse membership made concluding trade deals with the EU hard-going at the best of times, but recent trade deals had made it more difficult.

“On top of that is the cumulative effects of Mercosur and CETA and other agreements that they are trying to put in place,” he said.

“The agricultural sectors in particular are overly sensitive to what they see as value loss through competition.”

In particular, the EU’s 2019 deal with the Mercosur group of South American countries has made the bloc’s beef farmers nervous they will be driven out of business by a flood of low-value South American competition if tariffs are lowered as agreed.

The deal is awaiting approval by all 27 member states and is yet to enter into force.

Dairy Companies Association executive director Kimberly Crewther said she had confirmed to her by the EU’s top representative in NZ Nina Obermaier that its negotiators would be in a position to present a new offer on agricultural market access after Brussels bureaucrats returned from their summer break next month.

Obermaier gave no indications what would be offered.

Crewther said the UK’s recent record-setting five-year phase-out for dairy tariffs in its free trade agreement with Australia had put the EU on notice it needed to lift its game.

“That ups the ante in terms of where we see that developed countries that are leaders in the global trade system should be at in terms of their agricultural market liberalisation,” Crewther said.

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