April Trade Update
The tenth round on New Zealand EU FTA negotiations ended on 30 March.
Some progress was achieved but big differences remain. The EU has yet to be able to table a goods market access offer that is anywhere near acceptable to New Zealand and there is no indication of when it will be possible politically to revise and improve this offer.
Without a reasonable offer on the table it has not been possible for New Zealand to move closer to the EU positions in a number of difficult areas – Rules of Origin, Intellectual Property, Geographical Indications, Government Procurement, and the proposed Wine and Spirits Annex.
It was not all doom and gloom. The two sides made good progress on Trade and Sustainable Development and on the Trade and Gender Chapter.
It is not looking as though much is going to be achieved ahead of the forthcoming Federal Elections in Germany. Once these are out of the way it will be important to make progress quickly as French elections loom next year.
In a highly unusual move in these COVID times New Zealand’s Chief Negotiator MFAT Deputy Secretary Vangelis Vitalis flew to Brussels for face to face talks with his EU counterpart. He was rewarded by two weeks of MIQ hospitality in Rotorua on his return to New Zealand.
As we write the fourth round of negotiations between New Zealand and the EU is underway. These talks are looking a bit more hopeful than those with the EU as the UK has tabled an improved goods market access offer. This still needs further improvement but it was not as terrible as the EU position or the initial UK position.
An interesting dynamic has emerged in this negotiation with the UK appearing to be playing New Zealand off against Australia in a race to be the first to conclude negotiations with the UK. There have been strange articles appearing in the UK media about how close New Zealand is to settling with the UK. At the same time rumours are being directed at New Zealand suggesting that Australia is about to settle the Australia-UK negotiation. Most bizarrely an article has appeared calling the Australian Trade Minister inexperienced when in comparison to his UK counterpart. This is most strange given Australia’s extensive FTA network. The UK has yet to negotiate a FTA from scratch. This all seems linked to an impending visit to the UK by Australia’s Trade Minister and a strong desire by the UK to be seen to be making good progress in both the negotiations with New Zealand and Australia. We recommend against taking trade policy scoops from the UK tabloids as necessarily accurate.
The first round of negotiations between Australia New Zealand and ASEAN on the upgrade of the AANZFTA agreement began in early April. This negotiation is officially set to last two years.
In a welcome sign the US has notified the WTO that it has withdrawn the Trump Administration’s plan to modify US commitments on Government Procurement as they related to certain medicines, medical devices and critical inputs. This is the first sign of a different and more liberal approach to trade policy under President Biden.