Countries Included in EU27: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden. Countries and commodities included in multiple groups are not double-counted. Gaps in data may be due to confidentiality data suppression.
The NZ-EU FTA presents a significant opportunity for New Zealand businesses to expand their reach and tap into the vast European market. This is bolstered by the already strong trade relationship between New Zealand and the EU27, with a total value of $4.44 billion in the March 2024 quarter alone. While New Zealand has already exported a substantial $1.59 billion of goods and services to the EU27, the NZ-EU FTA unlocks more potential for various sectors. Here's how specific industries can benefit:
- Agriculture: Key products like dairy, beef, and lamb will be more affordable for EU consumers. This, combined with easier market access, creates a more substantial market for New Zealand’s international shipping, leading to increased trade volumes and potentially higher revenue for New Zealand farmers. Wine exports are also poised for a significant rise due to the agreement's provisions.
- Forestry and Fisheries: Enhanced access to the EU market opens doors for these sectors. This not only benefits businesses but can also spur innovation in sustainable forestry practices and fisheries management. With a larger market to reach, companies may be incentivised to develop new methods that ensure environmental responsibility while meeting the demands of European consumers.
- Technology: Increased cooperation and investment fostered by the NZ-EU FTA create fertile ground for New Zealand tech companies. The agreement opens new markets for these businesses, particularly those specialising in clean technology and software solutions. The Free Trade Agreement ensures a secure and predictable online environment by facilitating cross-border data flows and removing barriers to digital trade. Provisions on e-contracts, e-invoicing, and source code protection further enhance operational efficiency.
In addition to the above, another reason why this European Union and New Zealand Free Trade Agreement is important is that it helps New Zealand diversify its export base and lessen its reliance on any single industry. This gives New Zealand the potential to drive economic growth, create jobs, and contribute to the country's overall economic prosperity.
Navigating tariff reductions and market access after NZ-EU FTA
The phased reduction of tariffs is a critical aspect of the NZ-EU FTA. This impacts export costs, competitiveness, and market access, for New Zealand businesses:
Immediate benefits
With 91% of goods exported to the EU will be tariff-free from the agreement's start date, the reduction-to-elimination of tariffs is expected to benefit a wide range of New Zealand’s trade sectors. For example, tariff removals on kiwi fruit could save growers up to NZ$16,000 annually, while the onion industry could see a cost reduction of approximately NZ$6.5 million annually.
Long-term gains
With the gradual elimination of tariffs that will cover 97% of goods within seven years, this is estimated to save New Zealand businesses NZ$100 million annually, rising to NZ$110 million after seven years, according to the Ministry of Foreign Affairs and Trade (MFAT).
This long-term reduction in costs will further enhance the competitive positioning of New Zealand businesses in the EU market, allowing them to invest in growth and innovation while maintaining a solid presence in the international shipping landscape.
Market access provisions
Quotas and special arrangements for certain products ensure a smoother transition and stable market entry for New Zealand businesses, particularly in the agricultural sector. The Ministry of Foreign Affairs and Trade estimates that the agreement could boost New Zealand's exports to the EU by up to NZ$1.8 billion per annum by 2035, contributing an additional NZ$1.4 billion annually to New Zealand’s GDP, directly fueled by this improved market access.
This anticipated rise in trade volume also translates to significant benefits for the logistics industry. Faster processing times and smoother movement of goods through the supply chain can be achieved with the reduction-to-elimination of tariffs and simplified customs clearance. This translates to lower costs and increased capacity for international trade logistics providers, allowing them to handle the larger volume of international shipping orders from New Zealand destined for the EU market.
5 essential steps in preparing for the NZ-EU FTA
To capitalise on the opportunities presented by the NZ-EU FTA, New Zealand businesses can take proactive steps to ensure smooth access to the European market. Here are some essential steps to consider:
- Market Research: Identify potential opportunities and understand the demand within the EU market for your products or services. Conduct thorough research to identify the most promising markets and understand consumer preferences within the EU.
- Compliance with EU Regulations: EU regulations for product safety, labelling, and packaging can differ significantly from New Zealand standards. Ensuring compliance requires expertise and careful planning. Partnering with a reputable logistics provider can help navigate this process.
- Documentation: Navigating customs procedures can be complex and time-consuming. Delays at customs can disrupt your international trade supply chain and impact your bottom line. As such, it’s essential to prepare all necessary documents to facilitate smooth customs clearance.
- Logistics Planning: Different product categories may have specific temperature control, packaging, or documentation requirements for export to the EU. You should develop a logistics strategy to ensure efficient shipping and delivery. Consider factors like temperature control for perishable goods, specialised packaging for fragile items, and any necessary documentation specific to your products.
- Digital Tools: Utilise digital platforms and tools for order processing and shipment tracking offered by logistics providers like DHL Express. These tools can streamline the shipping process and provide valuable shipment insights.
Leveraging DHL Express for seamless EU market entry
The NZ-EU Free Trade Agreement opens the door to a vast market, but navigating the complexities of international trade can be daunting. This is especially true for businesses unfamiliar with EU regulations, customs procedures, and the specific logistics requirements for particular product categories.
DHL Express offers tailored logistics solutions designed to help New Zealand businesses maximise the FTA’s benefits and facilitate a smooth entry into the EU market. Here's how DHL Express can help you capitalise on this trade opportunity:
- Customs Expertise: DHL Express' extensive experience with international trade logistics means they can expertly guide businesses through customs clearance, ensuring compliance with EU regulations and minimising delays.
- Efficient Logistics Solutions: With services such as MyDHL+, businesses can manage their shipments easily, from creating shipments, scheduling pickups and tracking deliveries in real-time. This digital platform simplifies logistics management and enhances efficiency.
- Specialised Shipping Solutions: DHL Express offers tailored shipping solutions, including temperature-controlled shipping for perishable goods and specialised handling for fragile items. This ensures that products arrive in optimal condition, regardless of their nature.
- Market Insights: Partnering with DHL Express provides access to valuable market insights, helping businesses understand consumer preferences and navigate cultural nuances. This comprehensive support ensures a seamless transition for your business as you enter the European market.
