An FTA with the EU

The Herald reports:

The ink is barely dry on the TPP and New Zealand has the prospect of another giant free trade deal in the offing with the European Union taking the first steps towards an FTA with New Zealand.

It was announced early this morning that the EU Commission will seek to negotiate separate FTAs with both New Zealand and Australia as part of its trade strategy for the next four years.

The caveat is that talks will take in account “EU agricultural sensitivities.”

That’s great news.

It won’t be a gold standard one as the EU Common Agricultural Policy is too entrenched. But if we can make progress towards liberalisation, that would be excellent.

EU Trade Commissioner Cecilia Malmstrom told the New Zealand Herald after the release of the strategy that it made political and economic sense to hold talks with New Zealand.

“When I started this job [a year ago] I was a bit surprised that we have free trade agreements either concluded or ongoing with so many part of the world but not with New Zealand and Australia who are national allies, friends, partners in so many other issues.”

Talks were happening already to establish the level of ambition which would be announced soon.

Yep long overdue.

Agriculture in the EU is still heavily subsidised, with payments under the Common Agriculture Policy accounting for 40 per cent of the EU budget but the levels of subsidy are reducing over time.

Ridiculous. NZ is proof that the agricultural sector actually does better without subsidies.