The EU-New Zealand Free Trade Agreement (FTA) commenced in 1 May 2024, and is set to deliver significant benefits for businesses and producers in the Bay of Plenty region.
With the elimination of tariffs on 91% of New Zealand’s goods exports to the EU from day one, and a further increase to 97% over seven years, local exporters can look forward to substantial cost savings. This is particularly good news for the region’s thriving horticulturists, as New Zealand exports over $714 million worth of produce to the EU annually. The immediate removal of $46 million in tariffs on these exports will provide a major boost.
Click here to see all the details on the Ministry of Foreign Affairs and Trade website. Click here to see the details on tariffs and rules of origin on the Customs NZ website.
Opportunities for Key Industries:
Kiwifruit continues to be New Zealand’s largest single horticultural export by volume and value. Exports exceeded $2.9 billion in 2022, representing a 15% increase in value from 2020, while volumes have increased 20% during this period. In 2022, the value of kiwifruit exports to the EU exceeded $800 million, according to the NZ Horticulture Export Authority.
Seafood producers in the Bay of Plenty will also reap the rewards, with the FTA eliminating up to 25% tariffs on NZ’s $241 million worth of exports. Honey producers, especially in regions like the Bay of Plenty and Coromandel, will benefit from the phased removal of the 17% tariff over three years, and for Mānuka honey, the tariff will be eliminated right away, as explained in this Beehive media release.
The dairy and red meat sectors are also poised to gain sizable new opportunities worth $600 million, with increased access to the EU market. This could see New Zealand account for up to 96% of the EU’s sheep meat imports and up to 60% of its butter imports, a significant increase from current levels.
Support for SMEs:
Beyond goods, the FTA also includes provisions to support small and medium-sized enterprises (SMEs) in the Bay of Plenty, offering simplified customs procedures, access to information, and financial assistance to aid their international growth and innovation.
Commitment to Sustainability and Environmental Standards:
The EU-New Zealand FTA’s commitment to sustainable trade, enforcing the Paris Agreement and ILO labour standards, also aligns with the Bay of Plenty’s reputation for environmentally-friendly production.
Additionally, the agreement includes restrictions on how New Zealand businesses can use of some terms to describe food, alcohol and other goods. Nearly 2,000 terms are now protected as geographical indications under this agreement. Examples of terms that have restrictions on their use include:
- Ouzo, Sherry, Port and Prosecco for beverages
- Feta and Gruyère for cheese
- Prosciutto di Parma for processed meat.
This means the terms can no longer be used unless the products are authentically made in the relevant EU region. Some terms have phase out periods. Click here to visit the NZ Intellectual Property Office website for more details.
Ensuring Compliance and Certification:
Given the dynamic world of trade sanctions, the agreement will mean EU customs clearance will have a close eye on imports to ensure all components that make up the product have clearly identified its origins.
Tauranga Business Chamber supports exporters with their certificates of origin and other customs documentation. We partner with the New Zealand Chambers of Commerce to deliver internationally recognised and trusted certification services by international customs officials across the globe. Find out more about our international documentation services by clicking here.
Overall, the NZ/EU FTA represents a significant opportunity for businesses in the Bay of Plenty to expand their reach, reduce costs, and tap into one of the world’s largest trading blocs. Local producers and exporters are poised to reap the rewards of this landmark agreement.
