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Australia and New Zealand outline agricultural aspects of trade talks with EU

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While New Zealand is reassuring the EU that a bilateral trade deal would not pose a threat to the bloc’s farming sector, Australia has made it clear that improved access to the European agricultural markets will be vital to conclude such an agreement.

Australia and New Zealand are among the few developed countries worldwide that have not conducted or negotiated any form of trade deal with the EU so far.

But there is no good reason why New Zealand should not be allowed to obtain such an agreement with the bloc, the country’s Trade Minister David Parker told the local media outlet Rural News.

“We are amongst the most aligned in our values with Europe of any country: we have strong democracies, we respect the rule of law, we have high environmental standards and we are a high wage economy,” he explained.

“It is wrong that despite the shared values and other things we have in common, New Zealand has been unable to reach a free trade agreement with Europe. We also think the vast majority of people in Europe agree with this, so we want to get a free trade agreement as soon as possible,” Parker added. 

According to the Trade Minister, who is set to travel to Europe next month, the biggest roadblock facing the country is that EU member states are not providing the European Commission with a mandate to formally launch the negotiations.

 “But I am optimistic, New Zealand poses no threats to EU agriculture,” he further declared.

“Our cow numbers are going down in NZ, so our dairy volumes aren’t going to go up. We are not all of a sudden going to divide a sheep in two and double our sheep numbers overnight, and NZ sheep volumes aren’t going to increase”, the Minister elaborated.

Meanwhile, Australia will put its farmers at the centre of a possible free trade deal with the EU, the country’s Prime Minister Malcolm Turnbull revealed last month (April 23) when speaking at the Konrad Adenauer Foundation in Berlin.

“The FTA we are seeking will deliver for Australian producers and farmers as well as their European consumers, and it must also signal to the EU’s agri-food sector the huge opportunities for expanded EU trade with and investment in Australia,” the country’s leader declared in his keynote address.

But Turnbull emphasised that Australian farmers will need to obtain better access to the EU’s Single Market, and sent out a clear warning that the agreement cannot be dominated or derailed by the demands of European farm lobby groups.

“The agreement must address the very restrictive farm tariffs and quotas that our farmers currently face,” he added.

The two countries are still waiting for the EU to formally launch the negotiations, as the European Commission expects to obtain a mandate from the member states in the Council by the end of this month.

Sheep and goat meat dominate EU imports

In terms of agri-food trade, Australia was the 12th most popular destination for EU exports in 2016 with a value of close to €3 billion (2.3% of the bloc’s total agri-food exports), while it was ranked 20th for EU imports with almost €2 billion (1.8% of all imports).

Meanwhile, New Zealand was the 47th most important country for the EU in terms of the bloc’s exports (€456 million, 0.3%) and was ranked 14th in the list of origin countries (2,366 million, 2.1%).

Considering the combined trade with Australia and New Zealand, sheep and goat meat were the most popular products bought by the EU with a value of €925 million, amounting to more than a fifth of the total imports, while the countries’ shipments of wine, vermouth, cider and vinegar were worth €815 million (18.8%).

The EU’s exports to the Oceanian countries showed a more varied picture, with pork meat (€289 million); chocolate, confectionery and ice cream (€283 million); spirits and liqueurs (€269 million); wine, vermouth, cider and vinegar (€255 million); and pasta, pastry, biscuits and bread (€254 million) being the most popular product categories with a share of around 7% to 8% each.

 

 

According to the Commission’s impact assessment, EU companies are currently facing less favourable conditions to access the Australian and New Zealand markets than traders from non-EU countries that have already implemented such trade agreements (such as the US, Japan, South Korea and China).

Among others, EU producers need to pay relatively high tariffs to export processed agricultural and food products to the two countries in the Southern Hemisphere.

The EU executive estimates that a partial elimination of these tariffs would reduce such costs by €146 million for the EU-Australia FTA and €100 million for the EU- New Zealand FTA, while a complete trade liberalisation would save €166 million and €208 million respectively. 

However, the EU farmers’ grouping Copa and Cogeca has expressed concerns about the consequences of the possible trade deals for the bloc’s meat and dairy sectors, and is therefore urging the Commission to oppose any concessions in terms of market access for these industries. 

The organisation nevertheless considers that an agreement could solve outstanding issues on Geographical Indications (GIs) as well as sanitary and phytosanitary (SPS) measures, such as Australia’s stringent conditions for the import of pork and poultry products.

In a resolution adopted two weeks ago (May 3), the European Parliament also urged the EU executive to “carefully negotiate” the trade deals and exclude the sheep and goat sectors from the upcoming trade talks.

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