On November 27, 2023, the European Union and New Zealand opened a new chapter in their economic cooperation. The two partners have been negotiating the free trade agreement for a long time, and now the European Union has ratified it. The Council Decision (EU) 2024/244 highlights the mutual commitment to improving market access and promoting economic growth between the two regions.

Overview of the Agreement

The agreement marks a significant milestone in the relationship between the European Union and New Zealand. It is designed to simplify trade processes, reduce tariffs, and remove barriers to facilitate a smoother flow of goods, services, and investments. Beyond the economic benefits, this agreement also represents a strong political bond with the aim of strengthening relationships and promoting common values on a global level.

Economic Implications and Benefits

For EU companies, the agreement initially means a significant reduction in trade barriers. The elimination of tariffs and quotas will facilitate market access for a wide range of products and services. This can lead to an increase in trade volume between the EU and New Zealand and open up new markets for EU companies.

The agriculture and food industry of the EU could particularly benefit from the agreement. With simplified trade conditions, EU agricultural products and food can gain a larger market share in New Zealand. Conversely, EU consumers benefit from a greater choice of New Zealand products.

Furthermore, the agreement also includes provisions on services, investments, intellectual property, and sustainable development. Therefore, EU companies can expect improved legal frameworks and better protection of their rights in New Zealand. At the same time, EU companies need to adapt to the new trade conditions and reconsider their competitive strategies. Additionally, some sectors, such as the automotive industry, may face pressure from increased competition from New Zealand.

Future Prospects and Strategic Importance

The free trade agreement between the EU and New Zealand brings both opportunities and challenges. It is therefore important for companies to carefully analyze the impact of the agreement on their specific business areas and develop appropriate adjustment strategies. As always, the customs experts at Gerlach are here to assist you and provide support. Please contact us if you have any questions about the free trade agreement between the EU and New Zealand.

The free trade agreement is also worthwhile for the Vietnamese side. 71 percent of all import duties on Vietnamese goods will be dismantled immediately. After another seven years, 99 percent of customs duties are to be abolished to strengthen the economy on both sides. This will lead to a noticeable increase in Vietnamese exports to the EU.

At this stage, free trade between the EU and Vietnam is a sign of improved international economic relations. This cooperation is designed to protect the rights of individual actors in both environments through the recognition of mutual standards. This also provides more comfort and less danger for local workers in their daily lives, so that they can carry out their work properly and fairly.

Changes for import and export

The Agreement includes Protocol 1 – on the definition of the concept of „originating products“ and methods of administrative cooperation. The Protocol sets out the conditions under which goods acquire preferential origin in the EU or Vietnam, and thus, under the Agreement, entitlement to preferential treatment in the country of importation. The conditions for sufficient treatment of non-originating materials are set out in Annexes I and II to the Protocol. The Protocol further regulates the method of proving the preferential origin of goods.

When importing into the EU: Certificate of origin EUR. 1 or declaration of origin for consignments of a value not exceeding EUR 6000. The declaration of origin must be signed by the exporter.

When exporting from the EU: Declaration of origin made out by a registered exporter (REX) which does not need to be signed by the exporter, or any declaration made by any exporter in respect of consignments the total value of which does not exceed EUR 6000, to be signed by the exporter.

A declaration of origin may be made out on an invoice, delivery note or other commercial document describing the products concerned in sufficient detail to enable them to be identified. The language versions of the declarations of origin are set out in Annex VI to the Protocol.

Closer trade relations through the investment protection agreement

The FTA is expected to significantly improve relations around the Vietnamese economy. This was already apparent before the new treaties came into force, as the investment protection agreement aims to reduce bureaucracy and effort as smoothly as possible. For this reason, free trade is one of the EU’s flagship projects to promote justice worldwide and also improve the economic situation.

Part of the ratification process for the new free trade was also that the improvements in trade are also linked to an improvement in the social situation. If possible, this should be initiated before the entry into force, so that the improvement of the situation can be considered step by step. In this way, trade and change will be linked in such a way that the Vietnamese economy can benefit from more exports and at the same time have access to European products and goods.