Stuff | 10 March 2022
Negotiators push on with NZ-EU free trade deal as French election ’sucks oxygen’ from talks
by Thomas Manch
The Government appears far from signing a free trade deal with the European Union, as negotiators enter a fresh round of talks and a French election looms.
Ministry of Foreign Affairs and Trade (MFAT) officials, who appeared before a select committee on Thursday, said negotiators were starting a new round of discussions next week, but the French presidential election due to occur in April left little room for negotiation.
"We’re ... conscious of political cycles in Europe and particularly the distraction, for want of a better word, of the important, nonetheless, French presidential election, which is due in a few months.”
“[This is] clearly sucking some of the oxygen from our ability to move the FTA [free trade] discussions forward,” MFAT chief executive Chris Seed told MPs at the Foreign Affairs, Defence, and Trade select committee
Though EU officials have described “significant progress" in the negotiations, Trade Minister Damien O’Connor has confirmed a key part of the deal for New Zealand – reducing tariffs and quotas for agricultural exports – has not progressed since an offer deemed “paltry” by his predecessor, almost two years ago.
“We’ve still got to move forward on our substantive alternative offer, but, you know, they’re clear on what we expect.” O’Connor said, in an interview last week.
O’Connor, who last week met EU counterparts in Brussels, said the election remained a focus for French politicians. It was widely reported, late in 2021, that France had persuaded the EU to delay negotiations in the lead up to its presidential elections in April.
France was a big player in the EU, and it was reasonable they wouldn’t complete technical details of the trade deal in the middle of an election, O’Connor said.
“We’re comfortable with that,” he said.
"We’d like to think we can complete this by the end of this year.”
At the select committee hearing on Thursday, National Party trade spokesman Todd McClay questioned MFAT officials on whether any agreements had been reached on Geographical Indicators (GI).
Europe wanted GIs in the deal as it would protect the names of certain products that originated from a particular area, such as feta and gruyere cheese, and prosecco. This would mean New Zealand producers would not be able to use these terms.
Wendy Matthews, an MFAT trade policy manager, said “nothing’s agreed until everything’s agreed”.
“That’s the basis in which we’re engaging on GIs, and from New Zealand’s perspective, certainly no movement, no finalisation of a deal on GIs can be made without commercially meaningful outcomes on agricultural products, in particular.”
McClay asked the MFAT officials for “an absolute guaranteed undertaking” that New Zealand would not compromise the Government-backed “single desk” arrangement for kiwifruit exports, which allows Zespri to hold a monopoly on the market.
This arrangement continues to be an issue that’s raised, Matthews said. The EU was asking for certain “disciplines” in how New Zealand managed this state-sanctioned monopoly.
“In terms of where we are landing with it, we are comfortable with the kind of disciplines that are being framed within the EU context.
Seed, in response to McClay’s request for assurance, made a joke: “When I join the Cabinet, I will be able to give you that undertaking. But that decision, I mean, those decisions lie with Cabinet ministers quite properly.”