Free trade deal with Europe ramping up

New Zealand Minister of Trade, Todd McClay. Photo / Nick Reed

New Zealand's efforts to secure a free trade agreement with Europe are ramping up, with Trade Minister Todd McClay flying out this weekend for meetings.

Mr McClay, who has only just finished chairing the TPP signing in Auckland, will attempt to progress another giant trade agreement when he meets with counterparts in the European Union.

He will visit the Hague, Stockholm and Brussels, meeting with a number of European Commissioners, including Trade Commissioner Cecilia Malmstrom.

New Zealand has for years attempted to improve trade conditions in what is a market of 500 million consumers.

Current settings are about 30 years old and many New Zealand exporters have become steadily disadvantaged as FTAs and preferential deals were done with other countries.

The EU is New Zealand's third largest export market with $7.7 billion in goods and services last year. The value of EU imports is higher at at $11.13 billion but New Zealand is 51st in EU ranking.

"This bilateral visit to Europe, my first as Trade Minister, is an opportunity to strengthen New Zealand's important relationship with the European Union ... and take forward the decision by the Prime Minster and EU Presidents in 2015 to proceed towards the launch of FTA negotiations," Mr McClay said.

On the trip over to Europe, Mr McClay will stop in Dubai and meet with the Minister of Economy of the United Arab Emirates, Sultan Bin Saeed Al Mansouri.

"I will also be meeting with the CEO and chair of Emirates to celebrate the airline's decision to fly directly between Dubai and Auckland," Mr McClay said.

"The United Arab Emirates is our tenth-largest trading partner, and this visit will allow me to build on our increasingly important trade and economic relationship."

New Zealand is also seeking a free trade agreement with the Gulf Cooperation Council.

Prime Minister John Key and then-Trade Minister Tim Groser visited the Gulf to push for an agreement in April last year, but no formal progress has been made.

After the visit, it was revealed that New Zealand had spent about $11.5 million on sending New Zealand sheep and equipment to businessman Hamood Al Khalaf's farm in Saudi Arabia, with $6 million of that spent on establishing a farm, including equipment and technology.

Foreign Minister Murray McCully said it was partly done to appease Mr Al Khalaf, who lost millions of dollars during a New Zealand ban on live sheep exports.

His ill feeling was a major obstacle in the way of a free-trade deal in the region, Mr McCully said, and negotiations were now able to move on. The farm would also act as a demonstration base for New Zealand agribusiness, and remove the threat of legal action, he said.

Opposition parties have labelled the deal a bribe, after a $4 million payment to the Al Khalaf Group was revealed, and that the farm and all animals and equipment would be owned by the group.