Brussels will be able to strengthen its commercial ties with Wellington. This Tuesday, MEPs voted largely in favor of a trade agreement between the European Union and New Zealand. Supported by more than 520 elected officials, the text nevertheless sparked an outcry from numerous organizations, which were offended by the consequences of this free trade agreement on the environment. And this, in a context where calls to relocate activities and production are increasing.
Concretely, the text aims to promote trade between the two territories, in particular by removing all customs duties weighing on European exports to New Zealand upon its entry into force, and 98.5% of European duties on New Zealand imports after seven years. In exchange, Brussels claims to have taken measures to protect local production: for example, New Zealand imports of “sensitive agricultural products”, such as beef or dairy products will be made “only in limited quantities”, and wines, The Union’s most prestigious traditional spirits and products, such as feta, will be protected, the commission promises. Likewise, the environment is taken into account, including “enforceable commitments” to the Paris agreement. Enough to make this text “a reference in terms of sustainable trade”, welcome the MEPs.
For the moment, bilateral trade between the two parts of the world reached some 9.1 billion euros in 2022, according to the Commission. The Union is New Zealand’s third largest trading partner. While Europe mainly imports agricultural products from Wellington, such as drinks, meats, fruits and vinegar, it sends manufactured products, such as machinery, chemicals or transport equipment. The twenty-seven are, moreover, the second largest foreign investor in the country, mainly in the financial sector and wholesale or retail trade.
Despite this already solid base, trade can be considerably boosted by the agreement, believes Brussels. The Union’s bilateral exports should increase by 31.7% in 2030 and its GDP should increase marginally, compared to a no-deal scenario, calculated the executive in its impact study. For its part, Wellington should see its trade jump by 23.4% and its GDP by 0.5%. The increase in trade should increase wages, European investments in New Zealand should increase “by more than 80%”, and consumers will benefit, assured the Commission.
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The fact remains that these assertions do not convince many organizations, which are worried about the effects of this agreement. If the Union affirms that the consequences on the environment will be limited, the economist Maxime Combes is more doubtful. “The EU-New Zealand Agreement is expected to impact climate change through “its impact on the volume of economic activity in the agricultural sector, particularly the meat and dairy sectors” which are highly energy-generating. methane and nitrous oxide, two of the most potent greenhouse gases, in New Zealand, as well as “anticipated additional trade flows between the EU and New Zealand which will lead to an increase in GHG emissions due for the transport of goods”, recalled the project manager at Aitec.
Likewise, in a recent declaration, more than fifty organizations – including Attac France, the CGT, the Confédération paysanne or France nature environment – called on MEPs not to validate the agreement, which “does not keep its promises”. “The main beneficiaries on both sides would be companies that often cause considerable damage to the environment and the climate,” lament the signatories, citing exporters of cars or chemicals. In addition, if investments can increase significantly, “the trade agreement does not provide for any specific measure to subject the planned liberalization of investments to sustainability criteria”, a “significant gap”, they add.
Some French elected officials in the European Parliament also spoke out against this text. Manon Aubry, for example, denounced “pure madness” as well as an “ecological and social disaster”, while Emmanuel Maurel, on the left, also accused the executive of “[sacrificing] our agriculture and our food sovereignty to import milk and sheep produced 20,000 km away.
For their part, the supporters of this text want to be reassuring. “In times of uncertainty, we must remain close to our allies, and this agreement will strengthen our already very strong bond with New Zealand,” said Renew MEP Karin Karlsbro, quoted in a press release from her group. “Today is a good day for the European Union […]. Together, we are advancing rules-based global trade, against a backdrop of a global wave of protectionism and isolationism,” said his German EPP counterpart, Daniel Caspary.
Despite this vote, the progress of this text, negotiations for which began more than five years ago, is not completely finished. Member states must still give their formal agreement this Monday, and New Zealand must ratify it. It must then come into force “by mid-2024”, according to the European Parliament.