The European Union and New Zealand signed a free trade agreement on Sunday which, according to Brussels, should lead to a 30% increase in bilateral trade within a decade.

Referring to the agreement, which will be concluded in June 2022 after four years of tough negotiations, European Commission President Ursula von der Leyen hailed the text as ‘ambitious’ and ‘very balanced’.

“New Zealand is a key partner for us in the Indo-Pacific region, and this free trade agreement will bring us even closer together,” she added in a statement from Brussels.

For his part, New Zealand Prime Minister Chris Hipkins praised a text that represents “enormous benefits” for both partners.

The EU is New Zealand’s third-largest trading partner, exporting in particular wine, fruit and meat to Europe.

Bilateral trade in goods between the two zones was worth just over EUR9 billion in 2022.

According to Brussels, EU exports to the Pacific archipelago could increase by up to EUR4.5 billion a year. EU investment in New Zealand could also increase by up to 80%.

The text also contains a chapter dedicated to ‘sustainable development’, which is unprecedented in a European trade agreement.

“With unprecedented social and climate commitments, (this agreement) promotes fair and green growth while strengthening Europe’s economic security”, said Ursula von der Leyen.

To come into force, the agreement will still need to be approved by the European Parliament and ratified by New Zealand.