Modelling agricultural impacts of EU-NZ trade liberalisation

The European Union and New Zealand have signalled a desire to negotiate a free trade agreement (FTA). This paper seeks to determine what form such an agreement would take by considering previous FTAs negotiated by each party. As agricultural is a particular significance to New Zealand and trade agreements in general, the impact on agriculture is assessed with use of a partial-equilibrium trade model. The report finds that likely areas of liberalisation for imports into New Zealand, are mechanical, electrical and transport goods. For New Zealand imports into the EU concessions on agricultural will be most significant, with an expected liberalisation on kiwifruit, and wine, and a renegotiation on quota access and sheepmeat and beef. One sensitive area is dairy products, where a longer tariff elimination period is expected. The trade modelling results show a small but positive impact on producer returns for both the EU and NZ