Protectionist sentiment within Europe’s agriculture sector should not stand in the way of a free trade deal between the European Union and New Zealand, a senior European official says.
Bernd Lange, the chairman of the European Parliament’s international trade committee, has also highlighted the EU’s frustration with Brexit talks in an interview with Newsroom, saying he had “no clue” who was speaking on behalf of the British government.
Lange was among eight members of the committee who flew to New Zealand for a “fact-finding mission” on the potential FTA.
The European Parliament last week voted 440 votes to 122 to set guidelines for negotiations with New Zealand, with discussions set to start by the end of the new year.
Speaking to Newsroom, Lange said the visit was a chance for MEPs to meet businesses and NGOs to discuss the FTA plans and understand the areas of concern in New Zealand.
“The Parliament is playing a very active role in trade liberalisation. At the end of the day we have to decide if a trade agreement is good or not, and to give the correct kind of advice, we’re here to have a discussion with all stakeholders,” Lange said.
A free trade deal was a chance to recognise the “common history and common perspective” that New Zealand and the EU shared.
Lange said there were “two sides of the coin” when it came to an FTA, with New Zealand likely to gain the most from an economic perspective as the EU was one of its largest trading partners.
“At the moment both sides are cooking the water quite hot, and then we’re going to the negotiating table."
However, the EU could also gain financially, with improved conditions for manufacturers and better access to public procurement.
There were also political benefits to the deal, which would provide a signal on the value of international trade.
“I’m convinced that in the time of [Donald] Trump, in the time of thinking not to [have] trade and political relations based on rules [but] based on power, we should really make a clear signal that we are thinking differently, that we want to have rules-based trading and political system to manage globalisation.”
Lange acknowledged there would be difficulties in winning over the European agricultural sector, with the EU’s negotiation guidelines outlining some products may need “special treatment”.
Both sides would need to find a middle ground during negotiations, he said.
“At the moment both sides are cooking the water quite hot, and then we’re going to the negotiating table.
“Of course some European producers have some doubt, beef producers in Ireland for example, but I’m really convinced there will be balanced agreement - of course we’ll find some compromise in the agriculture sectors, and in the other sectors we’ll also need some compromise.”
Brexit negotiations a frustration
One issue causing tension between the EU and New Zealand at the moment is proposed changes to its tariff rate quotas as a result of Brexit negotiations with the UK.
Kiwi exporters fear the proposed methodology for redistributing the quotas will leave them worse off, but Lange said the issue would need to be solved through the World Trade Organisation.
“We want to have a solution in principle covering all quotas and all products, not negotiating all items separately,” he said.
As for a public suggestion from MFAT’s deputy secretary of trade and economic issues Vangelis Vitalis for a “1+1=1” approach, where both the UK and the remaining EU states would separately retain their existing quotas but third-party countries would ensure their overall combined exports did not exceed the original volume, Lange was dismissive.
“I learned at school that one plus one is two.”
The quota changes would not have a significant impact on New Zealand’s access to the EU, still “a big market of over 400 million consumers”, and were a result of the UK’s decision to leave.
“With some partners, the flexibility is gone, but this is related to the decision in the UK.”
“It’s totally unclear who’s speaking on behalf of the government. [Theresa] May, [Philip] Hammond, Davis, [Boris] Johnson? I have no clue, because [they have] totally different positions."
Lange said the EU still needed a clear understanding of its future relationship with the UK. Public opinion in the UK was going in the direction of a “hard Brexit”, with no trade agreement once the country left the EU in April 2019.
However, if there was to be a trade deal, he did not believe it could be completed before then - despite the UK’s Brexit Secretary David Davis suggesting a deal could be agreed within twelve months.
“It has to be a really comprehensive trade agreement, with a lot of details that have to be arranged...
"It will take time, I’m quite convinced we will not have it in force in April 2019.”
Lange displayed the EU’s frustration with the state of Brexit talks when he spoke about the difficulty of understanding the UK’s position.
“It’s totally unclear who’s speaking on behalf of the government. [Theresa] May, [Philip] Hammond, Davis, [Boris] Johnson? I have no clue, because [they have] totally different positions…
“I was responsible for about 50 negotiations of Parliament with the [European] Council, I was involved in a lot of trade agreements and negotiations, so bad situations we had now with Britain, I never experienced - it’s really really worse because there’s no clear orientation, no clear perspective on the side of the partner.”
"Despite fears that other European countries could follow the UK out of the EU, Lange believed Brexit would in fact lead to a “more united Europe”.
“Of course at the beginning there are some member states looking to the exercise, but reflecting on the political and financial consequences of Brexit, it goes more and more in the direction of the strengthening of the European Union.”