EU-NZ trade negotiations launched

EU Trade Commissioner Cecilia Malmstrom with Trade and Export Growth Minister David Parker at Parliament. Photo: Lynn Grieveson.

Trade negotiations between New Zealand and the European Union have officially been launched, with both sides hoping the deal sets an example for the rest of the world.

EU Trade Commissioner Cecilia Malmstrom, in New Zealand for a two-day visit, was at Parliament on Thursday to launch talks on a free trade agreement.

Trade and Export Growth Minister David Parker said the EU was already New Zealand's third-largest trading partner, with two-way trade excluding the UK worth about $16 billion, and shared common values when it comes to human rights, the environment and respect for minorities.

New Zealand had adopted the EU's choice of name for its trade agenda, Trade for All, to reflect the commitment of both sides to convince their public of the benefits of trade, he said.

Malmstrom said the launch was an important milestone for the EU, while relations with New Zealand were already "deep and historic".

"New Zealand is a friend and an ally: together we stand up for common values."

An FTA could increase trade in goods between New Zealand and the EU by over 50 percent, she said.

At a press conference following a private meeting, the pair acknowledged there were some areas which would require ironing out during talks.

Malmstrom said agriculture had always been the most difficult part of trade negotiations during her time with the EU, but a compromise was always found.

"We are well aware of them, there are no hidden agendas here, we are very open about our sensitivities."

Parker said there had been no discussions about the length of patents for biologic medicines, an area of contention in EU talks with Canada and Australia, but he believed both sides were close in principle when it came to balancing intellectual property rights with access to cheap medicines.

He confirmed the issue of how to divide tariff rate quotas between the EU and UK after Brexit was discussed, and said the EU's proposal on how to resolve the issue was "prejudicial to the interests of New Zealand" in the Government's eyes.

It had developed a counter-proposal, and was now up to officials to find a solution that would satisfy WTO rules.

However, he said there was less urgency to resolve the issue than some thought, given the complexities of Brexit negotiations that were yet to be resolved.

Parker said he was hopeful that FTA negotiations could wrap up within a couple of years, with Malmstrom having asked him and officials to start work on potentially difficult issues like geographical indicators - which place protections on products from certain regions - early on so they did not cause delays towards the end of talks.

"I think that demonstrates a willingness on the part of the European side of the negotiation, which we share, to bring this to conclusion as soon as we can...but only time will tell," he said.

With a possible trade war looming between China and the US, Malmstrom said she was concerned about the wider implications for international trade.

"We are very worried about this of course because it's not yet but it could escalate to a full trade war which will be bad for the whole Europeans and New Zealanders, we are so interlinked in the global economies."

The WTO was not perfect, but had served the world well since its creation and its rules needed to be followed by all countries, she said.

Malmstrom said the EU-New Zealand negotiations could function as a "a blueprint here that could inspire others", a point on which Parker agreed.

"We can not only do good for ourselves in this trade agreement, we can actually set out rules that are a guide to how other trade agreements should look for the benefit of the world," he said.

The first round of negotiations will take place in Brussels from July 16 to 20.