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Merkel supports NZ-EU free trade deal

4th December 2014

MGI World Merkel supports NZ-EU free trade deal

A free trade agreement between New Zealand and the European Union (EU) moved closer to realisation after the German chancellor, Angela Merkel, agreed to back the cause.

New Zealand’s economic recovery continues to gain momentum and Merkel points out it is likely because the country is open minded and encourages free trade.

John Key, New Zealand prime minister, said Germany was already an important trading partner as its two-way trade value is now worth over $16 billion and has outpaced that with the UK, however he pointed out it could be more.

Merkel agreed, saying: "I think we should also come out in favour of a free trade agreement between the EU and New Zealand." She also noted that it already has such agreements with China and other areas of the world. More notably the new trade agreement with South Korea, which came not long after Australia’s.

"As a member of the European Union, Germany is very much championing, despite the great distance that separates us, to foster our trade relationships, to bring forward trade with the European Union", Merkel added.

While a low-level political agreement is already in effect, New Zealand remains one of the few countries in the Organisation for Economic Co-operation and Development (OECD) that has yet to engage in trade talks.

Free trade agreements may cut into export tariffs but are designed to boost trade on a long-term basis and previous results speak for themselves. Trade between New Zealand and China soared after the two countries sealed the deal on a free trade agreement in 2008.

By 2012, trade between the two nations had nearly tripled from NZ$2.3 billion to NZ$6.7 billion. A third of all exports to China came from dairy products and other key items included wood, wool, seafood and meat. China’s main exports to New Zealand were electronics, clothing and furniture.

At the time, New Zealand was the only OECD member to finalise a free trade agreement with China but times have changed and earlier in 2014 Australia closed such a deal.

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