4. Birth, death and taxes at EU trade launch

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

Birth, death and taxes were among the topics of discussion on the first day of EU Trade Commissioner Cecilia Malmström’s New Zealand visit. Sam Sachdeva was at Parliament for the launch of trade deal negotiations, and reports on the pains negotiators may face in their labours.

“Death, taxes and childbirth! There's never any convenient time for any of them,” Scarlett O’Hara said in Gone With the Wind.

All three were on the table during EU Trade Commissioner Cecilia Malmstrom’s first day in New Zealand, but it was the latter which was perhaps most inconvenient.

The launch of negotiations on a trade deal was overshadowed by the news Prime Minister Jacinda Ardern had gone into labour.

Malmstrom, a mother of twins herself, was asked to offer some advice: she politely declined, saying Ardern appeared to be doing “formidably” on her own, but welcomed another new arrival.

“We’re also giving birth to something today, which is the launch of our free trade agreement.”

“New Zealand is a friend and an ally: together, we stand up for common values...the values of sustainable trade, open trade, transparent trade, and trade that is done in compliance with international rules in the multilateral system.”

It’s had a longer gestation period than either New Zealand or the EU would have hoped, but after nearly three years of work, negotiations will begin next month.

Malmstrom was all smiles at a meeting with Trade and Export Growth Minister David Parker, and equally sunny when it came to EU-New Zealand relations.

“New Zealand is a friend and an ally: together, we stand up for common values...the values of sustainable trade, open trade, transparent trade, and trade that is done in compliance with international rules in the multilateral system.”

She highlighted economic as well as strategic benefits, saying bilateral trade in goods could increase by approximately 50 percent under a deal.

Parker offered praise for the EU, already our third-largest trading partner, and the views it shared with New Zealand on issues like human rights, labour standards, and the environment.

“Those countries in the world that really do walk the talk include the countries of Europe, and New Zealand.”

Agriculture, medicine areas of debate

Behind the pleasantries, negotiators are preparing to do battle on the issues where the two sides are not so like-minded.

Chief among them will be agriculture, with Malmstrom conceding the sector has always been the most challenging during trade negotiations she has been involved in.

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

Parker said he and his officials had already started work on some of the more contentious agricultural issues, such as the EU’s desire for geographical indicators - which place protections on products from certain regions - to avoid delays later on.

Another problem may be the length of patent protections for biologic medicines: New Zealand has a five-year period, while the EU has extended that up to 10 years in some trade deals.

Fears of price hikes for medicines were at the forefront of TPP protests, and Australian Trade Minister Steve Ciobo has already pledged his country will not give an inch on biologics during its own negotiations with the EU.

Parker suggested New Zealand was “broadly aligned” with the EU when it came to biologics, with Malmstrom agreeing the need to protect intellectual property had to be balanced with the desire for cheap medicines.

“You just have to find the right balance: I think we have had slightly different methodologies to do this, but we are aware of the sensitivities and we will of course find a...solution.”

Outside the scope of negotiations, but another area of contention, is the issue of how tariff rate quotas - restrictions on imports by volume - for New Zealand are divided between the EU and the UK post-Brexit.

New Zealand wrote to the EU last year outlining its frustrations with its proposed solution, which Parker said was “prejudicial to the interests of New Zealand”.

A counter-proposal has been authored by New Zealand and is sitting with officials - when a compromise may be reached is less clear.

Death of the WTO?

Along with the talk of birth came a discussion of death - more specifically, whether the international rules-based order as we know it is dying.

Malmstrom conceded the WTO has had its moments, including a ministerial conference in Buenos Aires last year when “we couldn’t decide on anything”, but insists it has served the world well.

“It’s not dying, but is in need of modernisation and strengthening.”

Its importance is heightened as China and the United States trade tariffs, which she said “could escalate to a full trade war which will be bad for the whole world”.

"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."

On top of multilateral efforts, there is a sense that high-quality bilateral deals, such as between New Zealand and the EU, could also help to set an example in the shaky global climate.

Malmstrom said the 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.

There will be a lot of early starts and late nights before that becomes a reality.