The ratified New Zealand European Union Free Trade Agreement (NZ-EUFTA) agreement comes into effect on May 1. 

The FTA removal of annual tariffs is expected to increase trade between the EU and New Zealand by 30%, according to an impact assessment. This is projected to save businesses €140 million in duties on a myriad of EU products such as clothing, wine, meats, chemicals, and pharmaceuticals. 

For New Zealand, the deal will remove tariffs on exports like kiwifruit, and benefit the country’s meat and dairy industry. EU investment in the country is also expected to increase by over 80%.

Kiwifruit is New Zealand’s largest horticultural export. In 2022 the country led global kiwi exports with 590,000 tons, followed by Italy with 282,000 tons and Greece with 185,000 tons, according to FAOSTAT. 

New Zealand offers an off-season supply to complement European production. According to New Zealand’s Horticulture Export authority, European nation’s were the largest importer of NZ’s kiwifruit in 2022, with the value of exports to the bloc exceeding NZ$800 million. 

Growing trade relationship

The EU is New Zealand’s 4th largest trading partner, with two-way goods and services trade worth NZ$20.2 billion in 2022. This year New Zealand exported a total of NZ$5.9 billion to European nations. The countries with the largest number of imports in the EU are the Netherlands with NZ$1.4 billion, Germany with NZ$1.2 billion, and France with NZ$63 million. The most exported products are meat and edible offal, and fruits and nuts. 

According to New Zealand’s Foreign Affairs and Trade officials, the country will benefit from significantly improved access into the EU and will gain a more level playing field in the market, particularly against other global exporters who have secured free trade deals with the European Union. 

The EU-New Zealand FTA is also the first of its kind to legally enforce commitment on climate measures. The agreement emphasizes both parties will remove tariffs and other barriers on renewable energy by “facilitating the removal of obstacles to trade and investment in goods and services of particular relevance for climate change mitigation and adaptation.”

Although the agreement will lower costs for traded goods, farmers across the EU have voiced their discontent against the list of free-trade agreements signed by the bloc to facilitate the movement of goods and services. Farmers have driven their tractors to the streets in protest over the recent partnerships, saying they will lead to unfair competition in the market and a decrease in domestic prices.