Trade Minister Damien O’Connor has revived hopes that New Zealand can land a free trade agreement with the UK this year and another one subsequently with the EU, following his just- concluded mission to European capitals.
Farm lobbies had not been confident when he set out. In the case of the UK we had been beaten to the punch by Australia.
It seemed unlikely NZ could get anything better than their Australian counterparts who appeared willing to accept a long phaseout on duties on, in particular, most farm products, including dairy.
Since then Australia has entered the AUKUS pact, which particularly riled France’s President Macron because Australia’s decision to acquire nuclear submarines from the US meant cancellation of a previous (very expensive) deal to buy French diesel-powered submarines.
So one of the major thrusts of O’Connor’s mission became advancing free trade negotiations with the EU.
On his return to Wellington, O’Connor said a deal would be great for NZ He told RNZ he would like to see an agreement “in principle” by the end of the year.
“Look, it’s a market of 450 million people. They’re all discerning high value customers for both services, technology and of course for our traditional meat, dairy and sheep meat products. So, you know, this is a valuable market and will be into the future.”
A sensitive issue in discussions has been the EU’s desire to protect over 2000 food and beverage ‘Geographical Indications’.
The dairy industry here said it is open to changing the labelling on some products to make the country of origin clear – but it is unwilling to stop using cheese names like feta and gruyere.
O’Connor said it is likely changes will need to be made – but he wouldn’t venture how far they would go.
“The transition period and, and how much they have to change ultimately will be part of the final agreement and, and I guess the ability for the exporters to accommodate that. I think the dairy industry is aware of that. But overall, we’re wanting to ensure that the trade deal offers more opportunities for the NZ dairy industry, even with changes that might be necessary.”
The UK has signalled it was prepared to eliminate tariffs on NZ honey, wine and apples. That’s good – but most NZ farmers won’t be happy with the kind of limits on key products of the kind accepted by Australia.
Access for NZ dairy and red meat is certainly proving contentious, with UK farming lobbies noisily opposing the Australia-UK deal, even with the phase-out over five years of tariffs on dairy products. NZ farmers will be relying on the team of NZ negotiators to do better than the Australians.
O’Connor previously had negotiated with the then UK trade minister Liz Truss, who has since been promoted to become Foreign Secretary. On his just- concluded mission O’Connor made a point of talking with new UK Secretary of State for International Trade Anne-Marie Trevelyan about the pending UK-NZ free trade deal.
An agreement in principle was supposed to be signed by the end of August – O’Connor said things always pop up at the last minute, so it is taking longer than expected.
“We’ve made good progress, It’s been a very short timeline for what is the substantive issue in a potentially hugely valuable trade deal with a trusted partner”, O’Connor says.
How far the Johnson government will go with NZ after being so badly bruised by farmer reaction to the UK-Australian FTA, especially in traditional Conservative-voting electorates, still appears to be hanging in the balance.