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EU trade talks ramp up ahead of Ardern’s Europe visit

With the fourth anniversary of negotiations fast approaching, NZ and the EU are upping the pace of talks in hopes of a resolution soon – but some familiar obstacles still remain

Trade talks between New Zealand and the European Union have entered a “rolling process” of negotiations, with hopes the long-running discussions can be wrapped up before Prime Minister Jacinda Ardern visits the region this year.

Negotiations towards a free trade agreement formally began in mid-2018, with Ardern and then-European Commission President Jean-Claude Juncker hopeful a deal could be done by the end of 2019.

Progress has been slower than expected, however, while the Financial Times reported last year that France had pushed the EU to delay negotiations until after the country’s presidential election taking place this month.

After a nine-month gap between formal talks, the 12th round of negotiations took place via videoconference last month.

In a webinar organized by the Ministry of Foreign Affairs and Trade to update New Zealanders on progress with the EU deal, New Zealand’s chief negotiator Vangelis Vitalis said there was “a very active and engaged and intensive process on both sides” to conclude the deal.

While the Covid-19 pandemic was in Ukraine and upcoming domestic elections in EU member states were among the factors that could delay agreement, Vitalis said Russia’s invasion also served as a reminder of the need for unity.

“I do like to think of this agreement as bringing together value and values ​​for both the EU and for New Zealand: very important elements on the commercial side, but also it is a moment I think, particularly in the face of Russian aggression in Ukraine , where like-minded partners do need to work together.”

The two sides had wrapped up a number of chapters at the most recent negotiations, but among the most critical issues still outstanding was the EU’s goods offer on New Zealand’s “sensitive items” like dairy, beef and sheep meat.

“Part of the challenge, to be frank, is that this negotiation is nearing its end: we are well into the fourth year and we are in an endgame, and we are having to now look again at the text and to see how that aligns with where the [Waitangi] Tribunal has come out.”
– Vangelis Vitalis, on revising e-commerce provisions

Kiwi negotiators needed a commercially meaningful offer if the deal was to be concluded, Vitalis said, particularly given the EU’s demands when it came to geographical indications protecting items produced in certain parts of Europe.

Another challenge came in the area of ​​subsidies, where there was “a significant gap between us in terms of ambition” on tackling subsidies for fossil fuels and other environmentally harmful goods.

Negotiators had also had to contend with a Waitangi Tribunal ruling that the CPTPP trade deal’s e-commerce provisions breached the Treaty of Waitangi, given there was similar language in the EU deal.

“We need to find ways to address and mitigate that problem that’s clearly been identified, and that is challenging. Part of the challenge, to be frank, is that this negotiation is nearing its end: we are well into the fourth year and we are in an endgame, and we are having to now look again at the text and to see how that aligns with where the tribunal has come out.”

The Government had been holding ongoing discussions with Treaty partners and other stakeholders, and was working on some revised language to go to the EU side for consideration.

Vitalis said the EU was also pressing for concessions, including on copyright extension which had proved a polarizing aspect of the NZ-UK trade deal.

‘Rolling process’ of talks

The UK deal contains a 20-year extension of copyright which would come into effect after a 15-year transition period, but EU negotiators had been pushing for a more swift extension.

Separately, the EU was carrying out a broad review of its approach to trade and sustainable development, which could affect its approach to some aspects of the deal.

Vitalis said negotiators had agreed to “a rolling process” to finish the deal instead of a 13th round of talks, with working groups meeting in recent weeks to hammer out a deal.

He would head to Europe in June with Trade and Export Growth Minister Damien O’Connor for some multilateral events which would allow opportunities to meet with EU counterparts, and would likely make a separate trip before then to “flush out” the EU’s market access offer as soon as possible.

Asked when an agreement might be reached, Vitalis said he was reluctant to put a deadline in place but noted Ardern’s previous announcement she would lead a trade mission to Europe later this year.

An EU report on the 12th round of negotiations said there were still “several remaining sensitive areas” in intellectual property rights which would require further work, while discussions on trade in goods focused on the EU’s request to be exempted from New Zealand customs fees.

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