European Union to race Britain for New Zealand, Australia trade deals

European Commission President Jean-Claude Juncker: "And today, we are proposing to open trade negotiations with ...
CHRISTIAN HARTMANN/REUTERS

European Commission President Jean-Claude Juncker: "And today, we are proposing to open trade negotiations with Australia and New Zealand."

Talks on a trade agreement between New Zealand and Europe could be launched as early as later this year.

The European Union wanted to launch and conclude free trade negotiations with New Zealand and Australia in the next two years, European Commission President Jean-Claude Juncker told lawmakers overnight Thursday (NZT), opening up a potential race with Britain.

If Juncker's timeframe was achieved, the EU could nip in ahead of the UK, which is also courting both countries but cannot negotiate independent trade deals until it leaves the EU in March 2019.

"Today, we are proposing to open trade negotiations with Australia and New Zealand," Juncker told EU lawmakers.

READ MORE: UK ready to pay up to $65 million to leave EU

Trade Minister Todd McClay says he expected the NZ-European Union Free Trade Agreement to be formally launched later this year after the European Commission and New Zealand both finalised their respective negotiating mandates.

"It's extremely important the European Commission and New Zealand have completed this next step," McClay said.

"An FTA will give New Zealand companies an opportunity to significantly increase trade with the EU.

"Two-way trade with the EU is worth more than $20 billion a year and creates thousands of jobs and opportunities for every region and city of New Zealand," he said.

"More than 8500 jobs are created in New Zealand by every billion dollars of exports," McClay said.

"That means a deal with the EU that increases trade has the potential to create thousands more jobs for Kiwis."

Juncker said there was a good chance that the EU would agree the main elements of a new free trade with the Mercosur countries of Argentina, Brazil, Paraguay and Uruguay and of an updated trade partnership with Mexico by the end of this year.

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"I want all of these agreements to be finalised by the end of this mandate. And I want them negotiated in the fullest transparency," he added. The current Commission's term of office runs until October 31, 2019.

FREE TRADE PUSH

The EU is seeking to capitalise on new trade opportunities in response to a more protectionist "America First" stance from the United States under US President Donald Trump.

"We will not miss any opportunity to step in. Whatever space the Americans leave behind, the Europeans will occupy," a senior US official said.

Juncker said, however, that while Europe favoured open commerce, it needed reciprocity from its trading partners.

"We have to get what we give," he said.

The European Union was not a group of "naive free traders" and would always defend its strategic interests.

The European Commission is now proposing that it should have the right to review foreign investment in important assets.

"If a foreign, state-owned, company wants to purchase a European harbour, part of our energy infrastructure or a defence technology firm, this should only happen in transparency, with scrutiny and debate," Juncker said.

France, Germany and Italy jointly welcomed the proposal to give member states a tool to intervene.

Juncker did not mention any country, but most EU concern over reciprocity and investment has centred on China.

China's COSCO Shipping already owns a majority stake in Greece's biggest port, Piraeus, and a share of a terminal at Europe's largest port, Rotterdam. China contributed to the European Union's Galileo satellite navigation programme, which critics say led to a massive transfer of technology.

 - Reuters

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