The European Union has signed a free trade agreement with New Zealand. The two sides hope that removing the tariffs will increase trade by 30%. Investments are expected to increase further.
After years of negotiations, New Zealand and EU representatives signed the free trade agreement. It is scheduled to go into effect in 2024. Trade between the two partners is expected to increase by 30 percent as a result of the deal, European Commission President Ursula von der Leyen said at the signing in Brussels. European Commission vice-president Valdis Dombrovskis said EU investment in New Zealand could increase by as much as 80%. Brussels wants exports from EU countries to New Zealand alone to grow by as much as 4.5 billion euros a year.
In June 2022, after four years of negotiations, the two sides reached a free trade agreement, which has now been signed. Von der Leyen said the "ambitious" and "very balanced text" would bring New Zealand and the EU "closer together". New Zealand Prime Minister Chris Hipkins said the agreement offered "enormous advantages" to both parties.
Agreement also deals with sustainable development
The text also includes a chapter on "sustainable development" for the first time in an EU agreement. Von der Leyen spoke of "unprecedented social and climate policy commitments" to ensure "equitable and green growth". The deal still needs to be ratified by the European Parliament before it can come into force, and must also be ratified by New Zealand.
Statistics show that in the first year of the FTA's entry into force, companies can save about 140 million euros in tariffs. The EU is already New Zealand's third largest trading partner, mainly exporting wine, fruit and meat to Europe. In 2022, bilateral trade totals slightly more than 9 billion euros. Germany has recently become New Zealand's most important trading partner within the EU, according to the federal government. Germany in particular exports vehicles, machinery and medicines. Recently, New Zealand's most important exports to Germany have been agricultural and forestry products such as sheep and game, fruit, dairy products and wool.
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