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EU opens free trade negotiations with New Zealand, but there are areas of concern

June 21, 2018

NZ's main exports to the EU are lamb, wine, fruit and dairy, while we import medicines, aircraft and cars.

One of the most powerful figures in Europe was in Wellington today to launch free trade negotiations between New Zealand and the European Union.

It might take until 2021 for politicians to hammer out the deal but it's expected to be worth billions if it can get across the line.

Villa Maria Estate has been exporting wine to Europe for 30 years.

Executive director Fabian Yukich welcomed the free trade talks with open arms.

"I think it's a great idea that we're actually doing this - Villa Maria like the rest of the wine industry export 80 per cent of everything we make so anything around free trade has got to be good for us."

The EU's Trade Commissioner Cecilia Malmström was at Parliament for the launch.

"We are also giving birth to something today which is of course our Free Trade Agreement," she quipped.

The EU is New Zealand's third largest trading partner with this country's main exports being lamb, wine, fruit and dairy.

New Zealand's major imports from Europe are medicines, aircraft and cars.

The Trade Minister David Parker says the European Union is home for more than 10 per cent of all of the country's exports

"Even excluding the United Kingdom two-way trade is about $16 billion per annum," Mr Parker said.

Commissioner Malmström said it's possible the trade in goods could increase by 50 per cent if the FTA is completed.

New Zealand's Agricultural Trade Envoy Mike Petersen said he expects there could be some backlash from farmers in Europe.

"Well the sensitive areas will be focused around agriculture and this is typical for all the agreements that we're looking to put together.

And certainly I'm sure that we'll hear concerns from domestic farming groups around dairy and beef," Mr Petersen told 1NEWS.

The National Party welcomed the free trade talks.

"You've got a population in New Zealand approaching five million. You've got a population in the EU of 500 million, so a hundred times our population so it means a huge opportunity for our marketers," National's Gerry Brownlee said.

Trade negotiators from both sides will meet for the first formal round of talks next month in Brussels.

The government's hoping a deal could be struck within the next two years.

- By 1 NEWS political reporter Benedict Collins

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