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EU set to negotiate FTAs with Australia & New Zealand
26
May '18
Courtesy: European Commission/European Union
Courtesy: European Commission/European Union
The European Union is all set to begin negotiations for free trade agreements (FTAs) with Australia and New Zealand. The European Council this week authorised the European Commission to open negotiations and adopted negotiating directives for each of the negotiations. Commissioner for Trade Cecilia Malmström will visit these countries to launch negotiations.

“Today’s decision to open trade talks with Australia and New Zealand sends a strong signal to both countries that we value our partnerships with them and want to strengthen our existing ties. But it is also a reminder to the world of the EU’s commitment to openness, free trade and global cooperation,” said Emil Karanikolov, minister of economy of Bulgaria, which currently holds the presidency of the Council of the EU.

EU’s trade agreements with both countries would aim primarily at further reducing existing barriers to trade, removing custom duties on goods, and giving better access for services and public procurement in Australia and New Zealand.

The mandates are particularly concerned to protect vulnerable sectors such as agriculture by maximising the benefits of market opening without harming local producers. The mandates do not envisage full liberalisation of trade in agricultural products, which are foreseen as benefiting from specific treatment.

The mandates provide for a comprehensive and modern framework, based on the highest standards of labour, safety, environment, climate and consumer protection.

“These agreements will build on the recent successful agreements with Canada, Japan, Singapore, Vietnam, as well as Mexico among others, expanding the alliance of partners committed to open and rules-based global trade,” president of the European Commission, Jean-Claude Juncker, said in a statement.

Having trade agreements with Australia and New Zealand would provide EU businesses with a valuable entry point into the wider Asia-Pacific region. They will also put European companies on an equal footing with those from the other countries in the area that have signed up to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or that already enjoy better access to Australia and New Zealand through other preferential trade agreements.

Commissioner Malmström will travel to Australia and New Zealand in June to open negotiations at the political level. The first negotiation rounds between the teams of negotiators are then envisaged to take place in Brussels in July.

The EU already cooperates closely with Australia and New Zealand on economic and trade policy issues in the framework of partnership agreements which were concluded respectively in 2008 and 2017. The EU also has bilateral agreements with both countries on mutual recognition of some technical certificates which, by reducing the costs of testing and certifying of exports and imports, facilitate trade in industrial products. Although generally limited, trade barriers for some sectors, such as agriculture or textile products, remain quite substantial.

The EU is Australia’s third largest trading partner. Annual bilateral trade amounted to more than €47.7 billion in 2017, with a positive trade balance of more than €21 billion on the EU side, the Council said. EU’s exports to Australia are predominantly manufactured goods while Australia’s exports to the EU are dominated by mineral commodities and agricultural products. EU companies supply commercial services worth nearly €20 billion to Australia and hold investments in the country worth more than €160 billion (in 2016).

With annual bilateral trade amounting to more than €8.7 billion in 2017, the EU is New Zealand’s second largest trading partner after Australia. New Zealand’s exports to the EU are largely dominated by agricultural products while EU’s exports to New Zealand are focused on manufactured and industrial goods. For the EU, trade with New Zealand results in a positive trade balance of €1.9 billion (in 2017), and EU companies hold more than €10 billion in foreign direct investment in New Zealand. (RKS)

Fibre2Fashion News Desk – India


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