Michalis Rokas: EU seeks partnership with NZ

Trade is no longer exclusively, or even primarily, about moving finished products back-and-forth between two parties. Photo / Brett Phibbs

Opinion

European Commissioner for Trade Cecilia Malmstrom yesterday announced she would seek approval from the European Union's 28 member states to launch trade negotiations with New Zealand.

The EU announcement indicates these negotiations would be one element in a new comprehensive overhaul of the EU trade strategy, Trade for All, that seeks to improve policy in three ways. It will ensure that trade policy effectively delivers economic results.

It aims to conduct negotiations in an open and transparent way. And it makes sure trade responds not only to Europe's interests but also its values. Each of these principles has implications for any future negotiations with New Zealand.

A trade policy that delivers results first has to focus on the right partners. That's why a priority in the new approach is to bring the world's largest single market closer to the world's most economically dynamic region, the Asia Pacific. The EU recognises that this region's dynamism is central to its own plans for growth. It also understands that the Asia Pacific's increasing economic weight gives the EU a strategic interest in the region's liberal, democratic and sustainable development. The EU looks to New Zealand as a longstanding, like-minded partner with similar interests for the region.

Getting results also means focusing on the trade barriers that matter today. Trade and the way people benefit from it are changing fundamentally. Trade is no longer exclusively, or even primarily, about moving finished products back-and-forth between two parties. Rather, it is increasingly a multilateral process that binds together producers, service providers and investors in and from many different countries in complex international value chains.

Consider, for example, a bottle of Marlborough Sauvignon Blanc. The grapes may be grown by New Zealanders in vineyards owned by a French company. They are harvested, pressed and bottled with machinery imported from the EU, US and elsewhere. The label is designed using US-made software and computers, while the end-product is transported to the world in Danish-owned ships, insured in London or Singapore.

Facilitating connections in such complex international value chains requires us to look at a much wider range of policies, not just barriers to movement of goods at borders (like tariffs). These can be anything from rules on services, digital trade and the movement of skilled technicians, experts and service providers to regulations on foreign investment, consumer safety and intellectual property protection. All of these issues were once considered the exclusive prerogative of domestic politics and the way trade deals approach them must reflect that. But they are essential if we want to capture the potential for growth and employment in these value chains. The EU's recent agreements with Korea, Singapore, Canada and Vietnam demonstrate greater ambition than most Asia-Pacific FTAs to address such issues. In any negotiation with New Zealand, the EU will likely make these agreements its starting point.

The EU's new approach to trade is also about transparency. As trade policy has encroached on traditionally 'domestic' policy areas, it has also raised concerns among citizens in Europe, and elsewhere. People need reassurance that trade deals are being carried out in their interests. That's why the EU is making negotiations more transparent than they have ever been - posting texts on-line during negotiations, consulting closely with civil society organisations and publishing texts of agreements as soon as they are concluded. This attitude will be the rule for how the EU approaches any future negotiation, including with New Zealand.

The final theme of the new approach is about values.

Trade policy is certainly about economic interests but the recent debates on trade all around the world have shown that people do not want to compromise on core principles. It cannot be about watering down the rules and regulations that give them confidence in the safety and sustainability of the products they buy. And it must support rather than undermine labour and other human rights as well as environmental protection around the world. These principles will also be at the core of our approach to negotiations with New Zealand. As partners that share these values, we have a chance to set a high benchmark for the region and the world.

With its Trade for All strategy, the European Commission is reaching out to the evolving Asia Pacific. In doing so, it wishes to see the region prosper in a way that is more open and more socially and environmentally sustainable.

After the recent conclusion of a bilateral political treaty and a robust partnership on sustainable energy in the Pacific, the European Union looks forward to closer relations with New Zealand in trade and investment.

• Michalis Rokas is EU Charge d'Affaires in New Zealand.