This is a major positive development which many believed was never going to be a prospect. I remember as recently as 2005 being at a lunch with the then Swedish Prime Minister in Wellington. I asked his views on the prospects for an FTA linkage between EU and New Zealand.
There was a shifting of seats, mainly from the New Zealanders around the table, heads were shaking and some actually burst out laughing. Two senior New Zealand business people told me I was crazy even thinking about such a prospect.
Actually this was not such a crazy idea. New Zealand and EU already have carefully negotiated tariff quota arrangements in place in the most sensitive product areas - beef, butter and cheese.
These used to be hugely valuable to the meat and dairy sectors as because of price distortions operating in the EU, they provided a return to New Zealand that far exceeded global prices. But this has changed in recent years as the EU has reformed its agricultural support policies and as global demand and prices have improved, New Zealand has sometimes failed to fully utilise its EU quota access.
No doubt the EU trade and agriculture officials will also have taken some comfort from the pragmatism shown by the New Zealand Government in the FTA outcome with Korea and that with TPP members US, Canada, Mexico and Japan. New Zealand trade negotiators can no longer be accused of being "free trade fundamentalists".
The EU looks as though it will be the perfect partner to experiment with a new model for the future.
Agriculture trade aside, I am particularly excited about what New Zealand and the EU might be able to negotiate to integrate our two services economies. I was very pleased to read the emphasis given by the EU to the role being played by global value chains. The importance of trade agreements and investment flows for job creation is also well emphasised by the EU in their strategy. This linkage seems to be missing in the minds of some New Zealand politicians at present.
What excites me most about an FTA negotiation with the EU is the prospect to develop a new more inclusive model for future trade negotiations. We were somewhat hampered in this by the US and others when it came TPP I have considerable sympathy for those complaining about the secretive nature of the negotiating process.
Leaked texts have shown (most obviously that on Intellectual Property) that our negotiators have been listening to the various interest groups and have done a great job in protecting our interests. It was a pity that we have had to rely on the arseholes involved in Wikileaks to demonstrate this.
Much of the controversy that has absorbed so much of the oxygen around this negotiation would not have been there if there had been a regular sharing of negotiating positions and texts. I was therefore delighted to read in the EU strategy a strong desire to engage more with politicians and civil society and to make public mandates, negotiating text proposals and the final outcome - even before the legal scrub (the process currently delaying the release of the TPP text).
This will clearly be a challenge for the New Zealand trade negotiations culture but culture change is in my view well overdue. The EU looks as though it will be the perfect partner to experiment with a new model for the future.
Charles Finny is a Partner at Wellington Government Relations Consultancy Saunders Unsworth. He is a former senior trade negotiator who still provides advice to Governments here and around the world. These are his views not those of Saunders Unsworth or any of his clients, or any of the Boards he might sit on.
