EU free trade deal with New Zealand takes step towards reality

A free trade deal between New Zealand and the European Union has taken a significant step towards reality, with the EU outlining plans for an agreement in a new strategy.

News of a potential deal comes a week after a significant trade win for New Zealand, as a final deal was reached on the long-awaited Trans-Pacific Partnership (TPPA), a 12-nation free trade deal involving the United States, Canada and Japan among others.

The EU Commission released its new trade and investment strategy early Thursday morning, with New Zealand singled out as a country where it wanted to "open the door to new negotiations" for a free trade deal.

In a statement, the commission said the strategy was a "direct response" to discussions around the EU's equivalent to the TPPA, a Transatlantic Trade and Investment Partnership (TTIP) deal that is being negotiated with the United States.

It said the strategy "opens the door to new negotiations in the vital Asia-Pacific region", with New Zealand and Australia singled out as sharing a close relationship with Europe.

"Australia and New Zealand are Europe's close partners, share Europe's values and views on many issues, and play an important role in the Asia-Pacific region and in multilateral settings.

"Stronger economic ties with these countries will also provide a solid platform for deeper integration with wider Asia-Pacific value chains. Strengthening these relationships should be a priority."

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However, dairy and other agricultural sectors may face an uphill battle to win significant concessions; the strategy notes that any negotiations with New Zealand would need to take into account the EU's "agricultural sensitivities".

EU Trade Commissioner Cecilia Malmstrom told the NZME it made political and economic sense to discuss a free trade deal with New Zealand.

"When I started this job [a year ago] I was a bit surprised that we have free trade agreements either concluded or ongoing with so many part of the world but not with New Zealand and Australia who are national allies, friends, partners in so many other issues."

Malmstrom said talks were already underway to outline the goals for the deal, which would be revealed soon.

"This is a message of intent from our side. We think it would make sense economically and politically to engage with New Zealand," she said.

"We know New Zealand has very offensive interests in dairy and agriculture, absolutely no secret, and you are very competitive there...but there are other items as well where we could deepen our co-operation as well."

EU member states and the European Parliament will now consider the strategy, while discussions with stakeholders will also need to happen before any further steps towards an agreement are taken.