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#Trade: Commission gets green light to start trade negotiations with #Australia and #NewZealand

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The European Commission welcomed today's (22 May) adoption by the European Council’s trade ministers of negotiating directives for free trade agreements with Australia and New Zealand. The agreement liberalises sectors such as machinery and services, while offering some protection to European farmers, writes Catherine Feore.

As the EU is Australia’s third largest trading partner and New Zealand’s second largest partner. The EU estimates that free trade agreements will increase EU exports to these countries by about a third in the long term: EU – 4.9 billion, AU – 4.2bn, NZ – 1.3bn. The sectors that have the most to gain from the free trade agreements are motor equipment, machinery, chemicals, processed foods and services.

European Commission President Jean-Claude Juncker (pictured) said: "These agreements will build on the recent successful agreements with Canada, Japan, Singapore, Vietnam, as well as Mexico among others, expanding the alliance of partners committed to open and rules-based global trade. Open trade must go hand in hand with open and inclusive policy making."

The EU has couched any progress in the agricultural sector in measured language, stating that: ‘the mandates do not envisage full liberalization of trade in agricultural products,’ but adds that they hope to maximize the benefits of market opening without harming local producers. Both Australia and New Zealand’s exports to the EU are largely linked to agricultural products.

Trade Commissioner Cecilia Malmström said: "We look forward to adding Australia and New Zealand to the EU's ever-growing circle of close-trading partners. We are already close in terms of shared values and our open, global outlook. Together, we will now negotiate win-win trade deals that create new opportunities for our businesses, as well as safeguard high standards in key areas such as sustainable development.”

In a thinly veiled dig at the US, Malmström added that the talks send a strong signal at a time where many are taking the easy road of protectionism. The agreement is hoped to put the EU on an equal footing to TPP (Trans-Pacific Partnership) countries. The agreements are thought to offer EU businesses with a valuable entry point into the wider Asia-Pacific region.

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