Home » European Lawmakers Give Green Light to ‘model’ NZ Trade Deal
Economy Europe European Union Featured Global News News World News

European Lawmakers Give Green Light to ‘model’ NZ Trade Deal

The agreement is meant to be Brussels’ gold standard for sustainability requirements in trade deals.

Lawmakers in the European Parliament on Wednesday signed off on the bloc’s free-trade agreement with New Zealand, heralded as Brussels’ gold standard for making its trade deals greener.

“This is the most modern agreement that we as a European Union have concluded,” German MEP Daniel Caspary of the center-right European People’s Party, who led work on the deal in the Parliament, told reporters ahead of the vote.

“We want to ensure that in the future such high standards will be complied with across the board,” he said, arguing that the agreement should be a “model” for other deals.

MEPs approved the agreement by an overwhelming majority of 524 votes in favor, 85 against and 21 abstentions.

Brussels and Wellington signed the deal — the first free-trade agreement to include the EU’s ambitions on sustainability — in early July.

In economic terms, the agreement is relatively small for the EU, but it represents a symbolic win as the bloc seeks to diversify its sources of supply with like-minded partners in the Indo-Pacific region at a time of growing tensions with Beijing. It is expected to boost bilateral trade by up to 30 percent, and to increase EU investments in New Zealand by 80 percent.

Under Brussels’ new approach to trade deals, the EU’s partners could face sanctions if they fail to respect the labor or sustainability standards enshrined in the bloc’s agreements.

But the standard set in the agreement with Wellington is proving hard to match in a host of deals that Brussels is scrambling to bring over the line.

The EU’s push to raise its environmental and climate standards — and the expectation that non-EU countries wanting to trade with the bloc should do the same — has irked governments around the world, which accuse Brussels of using sustainability as a pretext to erect trade barriers against them.

Negotiations between the EU and the Mercosur bloc of South American countries to seal a landmark trade deal that’s been two decades in the making hit a wall over sustainability requests from Brussels earlier this year. In their counteroffer, the South American countries have sought €12.5 billion from the EU in cooperation aid.

And while the EU is on track to sign an agreement with Chile — key to the bloc’s goal of becoming a global leader in battery production, as it would open up access to Chile’s massive lithium stocks in its Atacama salt flats — left-wing lawmakers have been lamenting that it falls short on enforceable sustainability requirements.

Bernd Lange, the chair of Parliament’s trade committee, called Wednesday’s vote “historic.”

“Never have I witnessed such broad support for a trade agreement in European Parliament,” he said. “Clear recognition that, despite the difficult geopolitical and economic context we are in, our trade agreements are on right track and provide stability in uncertain times.”

Wednesday’s vote is one of the final steps before the agreement can take effect. New Zealand is yet to ratify the agreement — something that could happen in the first quarter of next year. Both sides are eyeing an entry into force by next summer.

Source: Politico