NZ - EU FTA would benefit SMEs says McClay

A free trade agreement with the European Union would be of particular benefit to small and medium enterprises, Trade Minister Todd McClay said today from Brussels where he has been holding meetings about future negotiations with the EU.

He also indicated he would place an emphasis on "stakeholder consultation," known to be of high importance to EU Trade Commissioner Cecilia Malmstrom as she tries to win support for the FTA the EU is negotiating with the United States (the Transatlantic Trade and Investment Partnership, or TTiP).

Mr McClay had several hours of private discussion with Ms Malmstrom in Nairobi last December at a World Trade Organisation ministerial meeting, including about her consultation with civil society.

Mr McClay met her again in Brussels this week along with EU vice-president Jykri Katainen to progress an in-principle agreement to start talks.

Later he said they all agreed that "an EU-New Zealand FTA would bring mutual benefit to our economies."

"A high quality deal would bring benefits for citizens and SMEs and help to drive innovation and productivity."

After lobbying by groups such as EuroChambres , the EU now includes SME chapters in all its trade deals.

That should be no problem for New Zealand; the Trans Pacific Partnership has a standalone chapter on SMEs.

Eurochambres, an umbrella organisation covering 45 countries, 1700 local chambers and 20 million companies, last year gave its blessing to the EU beginning talks with New Zealand and Australia, respectively.

Director for international affairs Dirk Vantyghem said it did so on the basis that there was strong focus on the needs of SMEs to get more of them trading internationally.

He told the Herald in a recent interview that the sorts of measures being negotiated in the TTiP should be the benchmark for future deals, such as one with New Zealand,
That included not just negotiating a deal but developing tools to make sure SMEs could benefit from it.

Too often, negotiators thought that once the deal was done, that was it.

"It's only then that the actual work starts."

Within Europe, the chamber also wanted what he called "a more holistic approach" to trade agreements in which smaller EU countries could be part of a bigger plan for European economic diplomacy.

The European Commission had the authority to negotiate trade deals but the role of trade promotion still lay with the 28-memebr countries.

"But it is not so black and white anymore," Mr Vantyghem said.

"Where do you draw the line between trade policy and promotion."

Releasing new trade policy last year, Ms Malmstrom made it clear that the EU would be promoting a new specialized court for investor-state dispute settlement in any future talks, as it has done with the United States.

Before his Brussels trip, Mr McClay said he was open to both new ideas on consultation with civil society and the EU ideas on ISDS.

"That is not to suggest that I think there was anything wrong with the TPP process because it was very widely consulted on," he said.

" It's just that the EU have a very different approach because they have 28 countries."
He said the TPP had undoubtedly improved upon ISDS safeguards and that every free trade agreement kept improving on previous agreements.

"ISDS under TPP does improve over previous ones and with the EU I will looking for further improvement."

Public submissions on the proposed FTA with the EU close on February 29.

"I would urge all businesses, NGOs, and members of the public who have not year already had a say to do so.

But he said there would be further opportunities for public input.

Mr McClay said he had invited Ms Malmstrom to visit New Zealand.

The EU is New Zealand's third largest trading partner and second largest source of foreign direct investment.

Exports to June 2015 were worth over $8 billion and imports over $11.5 billion.