Global commerce - Farewell to Trade Barriers: The EU-New Zealand Free Trade Agreement
The latest development sees the European Union (EU) and New Zealand enter into a comprehensive free trade agreement. This new arrangement kicked off on May 1st, ushering in a frequent removal of most customs duties.
Preliminary projections from the EU Commission suggest that companies within the Union could save around 140 million euros annually in reduced duties. The overall impact on bilateral trade is predicted to surge by a significant 30% in a ten-year span, with EU exports to this South Pacific nation potentially reaching a staggering 4.5 billion euros per year.
Unique consideration for the agriculture sector in the EU
To satisfy the EU's agricultural interests, certain dairy products, beef, sheep meat, ethanol, and sweetcorn have been spared from trades liberalization. Instead, there are quota-based arrangements in place permitting limited duty-free or discounted imports from New Zealand.
This deal also introduces a novel approach to sustainable development within the EU, with potential penalties for violations of fundamental labor laws or climate policy commitments from the Paris Agreement.
DIHK sees the development as a beacon of hope
The German Chamber of Industry and Commerce welcomes the agreement's enactment, terming it a "bright spot in a progressively challenging international trade landscape." German companies globally face protectionist barriers, making trade more challenging.
This agreement can help counterbalance protectionism because it streamlines trade processes by removing obstacles. The EU should now aim to broaden its reach in the region, possibly initiating additional agreements with India, Indonesia, Thailand, the Philippines, Malaysia, and Australia. The EU's trade with this entire region exceeds 500 billion euros - equating to one sixth of the bloc's overall foreign trade.
Primary New Zealand exports to Germany include agricultural and forestry products such as lamb, venison, fruit, dairy products, and wool, while the most crucial imports from Germany to New Zealand are cars, machinery, and pharmaceuticals.
A 18,000km voyage from Berlin to Wellington
The most recent statistics from the Federal Statistical Office indicate that Germany was New Zealand's main trading partner among EU members. On a global scale, Germany-New Zealand trade ranked 62nd, with German exports reaching around 1.6 billion euros. The long distance between the two capitals, Berlin and Wellington, which spans over 18,000 kilometers, does not hinder their dialog.
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Source: www.stern.de
