The wrapping paper of the nation’s newest free trade agreement is now on the floor. What do we have, exactly, in the new EU/New Zealand Free Trade Agreement (EU/NZ FTA), and what outcomes may we expect?

Firstly, the highlights in brief

In IP the trend toward longer copyright terms continues; artists may now see a royalty for their resold artwork; there’s a substantial expansion of the regime for the registration of geographical indications; and somewhat contrary to expectation no limitation upon Pharmac’s capacity to secure good deals materialised. 

The deal contemplates the facilitation of trade through digital means, which should massively reduce the "friction" faced by exporters currently facing a substantial paperchase to get into the EU market.

An opening up of government procurement, coupled with a focus on digital trade is likely to lead to many opportunities for New Zealand-based companies. 

And there are fresh commitments to facilitate the movement of persons between EU/NZ for business purposes that aim to support skilled professionals to bring expertise and experience to EU/NZ industries, and exporters to set up operations in the EU/NZ.

Intellectual Property

New Zealand will extend its copyright term by 20 years for authors, producers and performers and will also increase the strength of its technological protection measures under the Copyright Act (both rights extensions to be implemented within the next four years). Currently in New Zealand copyright protection for most kinds of works lasts for 50 years from the end of the year in which the author dies. The change will bring us into line with Australia and the USA as well as Europe.

New Zealand will establish an artist’s resale right regime that aligns with the EU regime. This is consistent with what was recently agreed by NZ under the EU/NZ FTA, and means that artists will receive a royalty on the sale price of any original artwork that is resold. However, the right only applies to sales involving a professional intermediary, for example a gallery or art dealer.

New Zealand will extend its regime for the registration of geographical indications (GI’s). 

Currently, only wines and spirits can be the subject of GIs in NZ. Under the revised regime, agricultural products, foodstuffs and other types of beverages will be capable of protection via a GI.  

It’s far from an even exchange, though. The EU has close to 2,200 GIs, many of which will have to be recognised in New Zealand, whereas the EU will protect 23 New Zealand  wine GIs (including Central Otago, Marlborough and Waiheke Island). 

New Zealand traders will need to stop using terms like "sherry", "port" and "feta" on their products over the next five to nine years – and adding the word "type" or "style" after a protected GI will not avoid liability. Happily, New Zealand traders who are already using "gruyère" and "parmesan" can continue to do so. 

There are already interesting issues arising around cheese trademarks – the Interprofession du Gruyère applied to trade mark Gruyère in 2018 but it is still not registered, and Kraft’s application to trade mark Kraft Parmesan Cheese is being opposed by Consorzio del Formaggio Parmigiano Reggiano with a hearing due in November this year. The IP Office may need to reconsider its approach to such trademarks now.

Crucially, those who need to stop using EU GIs for their products will eventually need to rebrand. Some care will be advisable. They ought not, for example, make the mistake of choosing Te Reo names as replacements without careful advance thought and consideration of indigenous IP issues. 

New Zealand has also agreed to make all reasonable efforts to accede to the Hague Agreement Concerning the International Registration of Industrial Designs. New Zealand made the same commitment under the UK FTA. Interestingly, Australia agreed to make all reasonable efforts to do the same thing back in 2005 pursuant to the Australia-US Free Trade Agreement. After 17 years and several reviews, it has still not done so. It will be interesting to see whether NZ has the same reluctance as Australia. 

Meanwhile Pharmac’s ability to source cost effective medicines for New Zealand appears to have emerged from the negotiations unaffected. Many people were concerned about the possible impact of FTA-driven changes to IP law on this, but New Zealand has not agreed to change its patent or data protection laws, so it appears these concerns have been sidestepped for the time being.

Digital Trade

The EU/NZ FTA contemplates the facilitation of trade through digital means: that is, the shift to "paperless" trading, the use of e-contracts, e-invoicing and e-authentication; the prohibition of customs duties on electronic transmissions; and the facilitation of the free flow of data.

While many New Zealand businesses already operate in online environments domestically, and should be comfortable with the technologies that will be employed in the digitalisation of cross-border trade with the EU, the increased uptake of digital solutions could be expected to drive efficiencies and result in a much more "frictionless" experience for NZ exporters.

Opportunities also exist for New Zealand companies experienced in designing and implementing e-trading solutions, who can benefit from (among other things) the free flow of data between New Zealand and the EU to offer their solutions into the massive EU market.

The facilitation of the free flow of data contemplated by the EU/NZ FTA will likely come up against arguments for data sovereignty/localisation. There is an intrinsic tension here between holding data on-shore/"close to home" and the benefits of allowing the flow and storage of data across two geographic areas on opposite ends of the globe. Finding an acceptable balance may take some work.

The EU/NZ FTA will also address protections for the rights and interests of businesses and consumers, including consumer protection regulation; privacy and data protection laws; and the management of unsolicited electronic messages. New Zealand already has a fairly well established consumer protection, privacy law, and unsolicited electronic messages (anti-spam) regime, but it will be interesting to see if and to what extent the more granular and technology-specific protections found in EU laws are adopted for the Aotearoa environment.

The EU/NZ FTA anticipates "ambitious" protections for source code, which if effective may provide additional comfort to developers looking to enter new markets. Similar protections in other FTAs limit the circumstances in which the "importing" government can compel the disclosure of source code, contemplating a framework that protects the developer from arbitrary requests for disclosure – providing some comfort that the value of the source code will not be undermined through entry into a new market.

Public Procurement

The EU/NZ FTA should see opportunities opening up on both sides of the ledger when it comes to public procurement. The EU/NZ FTA will go beyond what is currently anticipated by the WTO Government Procurement Agreement, and allow New Zealand and EU companies to participate on equal footing in respect of:

• in NZ, contracts with all public authorities whose procurement is regulated by the Government Procurement Rules; and
• in the EU, the procurement of all goods and services by central government; the procurement of health-related goods by regional government entities; and the procurement of public utility providers operating in the fields of ports and airports.

While the tyranny of distance may continue to provide a barrier for some providers, the opening up of government procurement coupled with a focus on digital trade is likely to lead to many opportunities for New Zealand-based companies who are able to adapt and move in an agile manner to provide solutions that are suited to the EU market – especially those that can be delivered from anywhere.

Movement of Persons for Business Purposes

The EU/NZ FTA contains commitments to facilitate the movement of persons between EU/NZ for business purposes for the following specific categories:

• Intra-corporate transferees – available for executives, managers or specialists transferred by their companies to perform specific roles. They will be eligible for initial periods of stay of up to three years, with commitments to process applications within tight timeframes (as soon as possible, and within 90 days at most) and to enable visa access for their partners and dependents.
• Independent professionals – available for self-employed business persons with advanced technical or professional skills who provide services in certain professional services sectors (subject to certain safeguards), with eligibility to stay for up to 12 months.
• Business visitors – available for business persons conducting certain specified activities, including in relation to establishment of a business enterprise or investment, and installers of services whose services are required as part of a contract to supply equipment. Business visitors would be eligible for periods of stay of up to 90 days in every 12 consecutive months.
• Contractual service suppliers – available for business persons providing services under contract in certain designated service sectors, subject to certain safeguards. They will be eligible for periods of stay of up to 12 months.

These commitments aim to support skilled professionals to bring expertise and experience to EU/NZ industries, and exporters to set up operations in the EU/NZ.

We will get a better understanding of the commitments once the full text of the EU/NZ FTA has been released (expected soon). It appears that some existing visa options for EU citizens who wish to work or invest in New Zealand (skilled migrant category resident visa, business visitor visa, specific purpose work visa, investor visa) may already cover some aspects of the above categories or may prove to be better alternatives. It could be that the New Zealand government will adjust some of these existing visa categories for EU persons and prioritise processing of their applications.

The UK/NZ Free Trade Agreement also includes commitments on the movement of business persons, making it easier to do business in UK/NZ.

Implementation

Full implementation of the EU/NZ FTA is planned to occur in 2024. A summary of the implementation process is available here.