Reconciling agricultural and sustainability objectives in the EU-New Zealand FTA

 

 

 

The negotiations of the EU-New Zealand Free Trade Agreement (FTA) officially concluded in June 2022 shortly after the European Commission’s communication on the renewed approach to EU trade agreement’s Trade and Sustainable Development (TSD) Chapters.

 

With this new FTA, the EU has raised the bar regarding sustainability commitments in its FTAs, in part due to New Zealand’s progressive stance on sustainability issues. The EU-New Zealand agreement holds both trade partners accountable to achieve the objectives of the Paris Agreement and to implement the core International Labour Organisation (ILO) conventions. Moreover, the agreement aims to intensify cooperation on fossil fuel subsidy reform and the development of sustainable food systems.

 

However, this FTA is not a silver bullet to solve sustainability issues linked to trade. The TSD Chapter remains largely cooperation based and the enforceability of the Parties’ commitment to implementing the Paris Agreement does not encompass accountability of the Parties to refrain from implementing national policies that defeat the purpose of the Paris Agreement, such as the continuation of subsidies for fossil fuel industries. Moreover, the FTA does not feature a strong hierarchy clause to ensure the agreement’s economic provisions do not receive total priority over the implementation of measures to further climate and environmental objectives, other than the General Exceptions Article which only applies to some Chapters.

 

This report concludes that the impact of the EU-New Zealand FTA on EU production of sensitive agri-food products such as beef, sheep meat, and dairy products will be limited, with an expected decline of 1.4% of beef and sheep meat production by 2030, and no significant change to the production of dairy products. This estimated production decrease coincides with the expected evolution of EU production for red meat, brought on by factors other than the FTA such as dietary changes, rising costs of production, and climate change effects.