EU-NZ trade deal done right offers broad benefits

30 June 2017
Head and shoulders portrait of Maureen
Dr Maureen Benson-Rea

We have seen how free trade agreements change the business arena. Stimulated by opportunities from the 2008 FTA, China has become New Zealand’s top trade partner, despite major challenges for local firms doing business there. The Trans-Pacific Partnership Agreement has been revived minus the USA, but its future is uncertain.

It’s time for business to turn its attention (back) to Europe. Negotiations for an EU-NZ FTA are expected to begin later this year. Research I’ve done with Dr Peter Zamborsky and Frank Olsson, Chair of the New Zealand Europe Business Council (NZEBC) strongly supports building on existing links to craft a gold-standard FTA that will deliver significant benefits for business and wider society.

We surveyed NZ-based firms and found many well-established links with the EU – our second largest export market for high valueadded products and services, and our second largest Foreign Direct Investment partner. The key strengths of our business relationships with EU partners focus strongly on the sophistication of the EU market, including product quality, R&D, maintaining competitiveness through customer responsiveness, long-term connections with innovative companies, technical know-how exchange and design feedback. Partnerships and collaborations (both equity and nonequity) feature strongly, and cultural fit and historical relationships are significant factors underpinning the depth of EU-NZ trade and business links.

Doing business in post-Brexit Europe may involve a separate agreement with the UK at some stage. We are confident that New Zealand can secure its access to the UK and the EU, and that the EU and UK will remain major trading partners in the future.

Over the EU’s 60 years, New Zealand business, diplomatic and trade representatives there have built a strong position in the single market, which has fostered collaborative, competitive, agile businesses. New Zealand firms doing business in the EU successfully deploy Europe-wide objectives with market-by-market adaptation and coordination. A prime example is Icebreaker, headquartered in Auckland, with offices in Germany, France, Switzerland and the Czech Republic.

The NZEBC membership fully supports the EU-NZ FTA and, unlike experience with the TPPA, it hopes that the negotiations will be conducted in a spirit of transparency emphasizing potential gains, including those for citizens. The EU’s approach to its negotiations with us are informed by wanting trade to deliver real economic results for consumers, workers and small companies, without compromising its core principles around human rights, sustainable development or high quality safety and environmental regulation and public services – delivering broad benefits.

New Zealand policymakers and negotiators are good at consulting with business, but the net could be spread wider to include civil society and consider the effects of trade agreements on the general population. “Trade for all” is a requirement that needs to be adhered to and seen to be adhered to.

The NZEBC has extensive links and is ready to assist in any way it can to ensure that the negotiations, consultations and any agreement with the EU are seen to set new high standards in global trade interactions. It sees the negotiations and the aim of simpler and more open relations with the EU in every aspect, including trade, as highly desirable, and in some ways overdue. Importantly, its members can send similar messages back to Europe.

While Europe and New Zealand have a long trading history and close institutional links, the FTA can renew and deepen interactions, and foster and exploit shared knowledge and innovations.

Dr Maureen Benson-Rea, Department of Management and International Business, University of Auckland Business School, is a co-founder of the University’s Europe Institute and member of the management committee of the New Zealand Europe Business Council.

Reproduced with permission from the National Business Review (NBR), EU-NZ trade deal done right offers broad benefits, published Friday 30 June 2017.