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New Zealand and the European Union have taken "a critical first step" towards a free trade agreement (FTA) with a commitment to start formal negotiations, Prime Minister John Key said Friday.
In a joint statement, Key, European Commission President Jean-Claude Juncker and European Council President Donald Tusk agreed to start discussions on a comprehensive FTA.
The discussions would focus on the next steps required to formally launch negotiations, including the scope and overall approach.
"The EU and New Zealand share a strong and close bond, and today's discussions have underlined our mutual desire to further strengthen our relationship," said Key, who is in Europe, in a statement from his office.
"I am pleased that we are able to announce a critical first step towards a FTA that should provide greater access to European markets, and make it easier for Kiwi and EU companies to do business with one another."
The announcement built on the EU's recently revised Trade Policy Strategy, which set out an increased focus on the Asia-Pacific region, and followed the conclusion of an FTA with the Republic of Korea and the 12-nation Trans-Pacific Partnership negotiations.
"The EU is a key trading partner for New Zealand with two-way trade totalling over 19 billion NZ dollars (12.73 billion U.S. dollars). It is also our second-largest investment source, as well as our largest research and development partner."
A statement from the delegation of the European Union to New Zealand indicated the difficulties faced by New Zealand's pillar agriculture sector in getting open access to the EU market.
"In parallel to the preparatory talks with New Zealand and ahead of seeking a mandate from EU member states for engaging formally in the negotiations, the Commission will assess the potential impact of the future agreement on EU interests, also taking into account the sensitivities in the EU farming sector," it said. Enditem
