David Parker says the EU trade commissioner was "apologetic" over a leak revealing information about an agricultural trade offer between the EU and New Zealand.
In a speech earlier this week, Parker, the Minister of Trade and Export Growth, lashed out at a "worrying trend towards protectionism" seen in the EU and elsewhere around the world.
Referring to a copy of the EU's initial offer on agriculture that was leaked to European media ahead of the eighth round of EU-New Zealand free trade (FTA) negotiations, Parker said he was "disappointed by what we are being offered".
"This latest offer reflects agricultural protectionism in the EU," Parker said in his speech, which was given to mark the launch of the Government's post-COVID-19 trade recovery strategy.
"It is a very negative signal especially at a time when we are working together in the WTO [World Trade Organisation] and elsewhere encouraging countries not to be protectionist and to ensure trade can flow freely between us. For New Zealand exporters to face an unlevel playing field in the EU is unacceptable."
Parker told Newshub he had been "very clear with the EU that the current offer is not workable" but said he remained confident the two sides could "reach a high-quality and commercially meaningful deal that reduces the costs and barriers our businesses face".
"We always knew that negotiations on market access would be challenging and we will continue to seek an FTA that will level the playing field with countries that currently have advantages because of their existing FTAs with the EU," Parker told Newshub.
"If we cannot achieve a better offer from the EU we will look to increase trade with those countries that have struck a fair trade agreement with us."
Parker said he expressed his disappointment with EU trade commissioner Phil Hogan about both the terms of the offer and the fact it was leaked.
"Commissioner Hogan was apologetic in respect of the leak and he made the point that we are still in the process of our negotiations. This is a fair point. Our negotiators are continuing their work in the eighth negotiating round over this week and next," he said.
"Commissioner Hogan and I have a very strong relationship and I will not get into the detail of our discussions."
In delivering his criticism Parker pointed out that the EU is the world's largest dairy exporter, exporting more than New Zealand's total annual dairy production each year.
"I am advised that the EU domestic cheese market is growing at about 132,000 tonnes a year - but the EU's offer starts at 1500 tonnes. That's barely 0.02 percent of the EU's domestic market. The offer on butter access is 0.03 percent of the EU's domestic market.
"In 2019 the EU exported just under a kilo of cheese per Kiwi to New Zealand - without any tariffs being paid at all. The EU has offered us 3.3 grams per European citizen and has such a high tariff that it would practically restrict all trade," Parker said.
Despite New Zealand allowing all EU wine to enter the country tariff-free, our wine would not be able to be exported to the EU without tariffs until the seventh year of the proposed agreement, he added.
"Let's just say very simply, none of this is acceptable, including because so many of our competitors do not face these kinds of barriers."
Malcolm Bailey, chairman of the Dairy Companies Association of New Zealand (DCANZ), said he fully supported Parker standing up for exporters.
"This falls short of even paying lip-serve to free trade. It is unashamed protectionism from the world's largest dairy exporter," Bailey said.
He said the offer was "at odds with recent statements it has joined on the importance of maintaining open markets in the wake of COVID-19".
"This trade agreement is an opportunity for the EU to take real global leadership and send a positive signal for food trade. It's time for action to match words."
Federated Farmers also came out in support of Parker's stance, saying the offer was "insultingly low".
"I thought they'd made a mistake and put the decimal point in the wrong place," said Federated Farmers president Katie Milne.
"Thanks to this 'leak', we are now aware the EU intends to continue to prevent Kiwi farmers from fairly competing in the EU market, while at the same time seeking to impose absurd obligations, such as not allowing New Zealand farmers to call feta cheese by its generic name 'feta'."
Milne said it was disappointing to see the EU negotiators "ignore the long-standing relationship" between the region and New Zealand.
The office of EU trade commissioner has been approached for comment.
