Getting the EU trade deal over the line

First published on July 8, 2022
Updated 43 minutes ago

Podcast: the detail

Trade negotiators – with the help of Prime Minister Jacinda Ardern – have negotiated the free trade agreement with the European Union. But is it worth the compromises that have to be made?

Before New Zealand’s Free Trade Agreement with the European Union comes into force, it must be translated into the region’s 23 different languages.

But when you consider what it took to win it over – and the fact that many in the EU don’t even want it – the translation of the document is just one of the many complicated aspects of the deal.

“We are worth nothing to them,” Deputy Minister of Foreign Affairs and Trade, Vangelis Vitalis, told a crowd of several hundred farmers and other leaders in the primary sector this week.

He said he shared their frustration at “where to land with Europe on beef and dairy”.

“But let’s also be honest that our current access levels are negligible to zero.”

The meat industry says the deal is extremely disappointing and that the 10,000-ton quota is equivalent to 0.1 percent of Europeans’ annual beef consumption. Dairy leaders say it will bring them little additional volume and some of that volume will still be limited by quota tariffs.

Trade Minister Damien O’Connor says it offers great opportunities in the 27 EU member states, with a population of 500 million. After seven years, it will be worth $600 million to the meat and dairy sector.

That part of the deal will have major implications for future free trade agreements, said Charles Finny, a former trade negotiator turned government relations adviser.

“On the New Zealand side it actually makes a lot of sense, it’s a departure from previous policy positions and thank goodness knows where it will lead,” he says.

“From a positive perspective, it could mean that India or Colombia, possibly the US, will be less afraid of New Zealand as a negotiating partner, as we have shown to be pragmatic on the outcomes for dairy and meat. We have never before done to this extent.”

But he can understand why farmers’ groups are upset here, because it can be seen as a signal to the rest of the world that they’re willing to settle — missing out on the great results they’ve had in previous agreements, such as the one with the UK, China and Taiwan.

Finny also tells The detail about the hundreds of employees who worked thousands of hours to get to last week’s announcement.

“When I was first in this game and we were negotiating very important negotiations with Australia in the period of ’88, we would have had a team of maybe 10 New Zealand officials. Now you have literally almost hundreds of officials involved, and teams that also deal with specific issues,” he says.

Finny has often sat at the trade negotiating table – he was in Brussels with then Prime Minister John Key in 2015 when a formal agreement was reached to begin negotiations on a free trade agreement.

The closer the negotiations come to a close, the more tense things get, he says, recalling FTA talks that saw them walk away.

“There will always be very difficult problems for both sides and sometimes they cannot even be solved at the level of the officials.

“In most cases, the tough negotiations are conducted at the level of civil servants, some problems will be solved at the ministerial level of trade, there are very rarely substantive negotiations at the prime minister’s level, but they do happen.”

Vitalis pointed out to his audience at the Primary Industries Summit in Auckland that Jacinda Ardern was directly involved in the latest negotiations in Brussels and that O’Connor had been there all week.

“It’s fair to say there wasn’t much sleep on our team while we were trying to get through this.”

The deal is done, but it’s not a foregone conclusion, Vitalis says. When the New Zealanders left Brussels, European peasant groups were already gathering their troops.

“They already had a crisis meeting in parliament between some groups … so this is going to be a challenge, there’s going to be a huge diplomatic process to get this over the line, so we’re definitely far from done.”