New FTA enters into force early on 1 May reducing tariffs on New Zealand fresh produce exports including kiwifruit and onions

The New Zealand European Union Free Trade Agreement (NZ-EUFTA) has been ratified by the New Zealand parliament earlier than initially planned providing a boost for fresh produce exporters.

The agreement will enter into force on 1 May instead of July or August after the New Zealand parliament expedited the legislative process to assist kiwifruit and onion exporters.

“All parties involved in the committee process agreed to complete the legislative process by the end of March. This will mean the agreement can enter into force on the first day of the second month, 1 May, instead of July or August, which would have excluded much of this year’s kiwifruit and onion exports,” said New Zealand trade and agriculture minister, Todd McClay.

“This agreement offers significant benefit for our economy, and an earlier entry into force will see tariff savings of NZ$43m (US$25m) for kiwifruit exporters, and NZ$3m (US$1.8m) for onion exporters this season.”

Zespri chief executive Dan Mathieson said the immediate removal of the 8.8 per cent tariff on New Zealand kiwifruit exports would support efforts to grow exports to Europe, supply consumers with more kiwifruit and return more value to growers and partners.

Around 90 per cent of Zespri’s exports to Europe this season arrive after 1 May, though the removal of the tariff has been factored into the start of the season.

“It delivers tariff relief at a time when the industry is resetting after a very challenging period and consumers are also facing rising living costs. In the last two seasons growers have dealt with a significant labour shortage and resulting quality challenges which coupled with poor growing conditions and rapidly rising costs has put many under real pressure,” said Mathieson.

“This year the industry is poised to rebound strongly with more volume and a quality reset which has us ready to deliver a strong season in-market where demand continues to grow off the back of our ongoing investment.”

Onions NZ chief executive, James Kuperus said the early start to the agreement was great news for New Zealand onion growers, coming in time for the last half of the export season.

“The EU is New Zealand’s largest export onion market. We estimate that about 35,000 tonnes would be exported to the EU, tariff free, post 1 May. This volume would be worth an extra $3m or so, thanks to the early removal of the 9.6 per cent tariff,” said Kuperus.

Kuperus said New Zealand onion growers were having a better season this year.

“Quality is exceptionally good. This season’s onions will keep well and maintain their great taste,” said Kuperus.

“However, costs are continuing to increase – especially around labour – and there are obviously seafreight issues, thanks to conflicts and droughts. The industry is working around these challenges but now it has had access to Indonesia re-confirmed, growers are focused on finishing the season on a high.”