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    Putting Sustainability at the Heart of Trade

    Stockholm (NordSIP) – On 30 June 2022, the EU and New Zealand concluded a four-year negotiation process on an ambitious Free Trade Agreement (FTA). Asides from potentially unlocking €4.5 billion in annual exports from the EU, allowing EU investment into New Zealand to grow by up to 80%, and cutting duties for EU companies by €140 million, the agreement also represents a new step in the inclusion of sustainable concerns into trade policy.

    “New Zealand is a key partner for us in the Indo-Pacific region. This trade agreement brings major opportunities for our companies, our farmers and our consumers, on both sides. It can help increase trade between us by 30%. It includes unprecedented social and climate commitments. This new agreement between the European Union and New Zealand comes at an important geopolitical moment. Democracies – like ours – work together and deliver for people,” European Commission President, Ursula von der Leyen (Pictured, right), said.

    The deal is perhaps most notable for being the first to include recently recommended measures aimed at strengthening the implementation and enforcement of Trade and Sustainable Development (TSD) chapters of the EU’s trade agreements. These measures were announced by the European Commission a week prior to the FTA announcement, in a Communication on The power of trade partnerships: together for green and just economic growth”.

    “This is a new generation of trade deal, with both sides set to make real economic and environmental gains. New economic opportunities are vital as we strive to recover from the twin shocks of COVID-19 and Russia’s aggression against Ukraine. This deal will unlock a raft of fresh export opportunities for EU businesses and SMEs for goods and services. It also contains the most ambitious sustainability commitments in any trade agreement ever. This proves we are already delivering on our promise to get more added value from our trade deals in terms of sustainability,” Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, added.

    Among other contributions, the new approach to TSD allows civil society and Domestic Advisory Groups (DAGs) to lodge complaints on violations of sustainability commitments. More focus will also be put on implementation and enforcement, and on extending the standard state-to-state dispute settlement compliance phase to the TSD chapter of the EU’s trade agreements.

    “TSD commitments are legally binding and enforceable through the agreement’s general dispute settlement. Moreover, for the first time in the EU trade agreement, the TSD chapter foresees the possibility of trade sanctions as a matter of last resort, in instances of serious violations of core TSD commitments, namely the ILO fundamental principles and rights at work, and of the Paris Agreement on Climate Change,” New Zealand’s Prime Minister, Jacinda Ardern (Pictured, left) noted on this occasion.

    Image courtesy of EC - Audiovisual Service
    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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