Ex-ante Study of the EU-Australia and EU-New Zealand Trade and Investment Agreements

April 2017

Ex-ante study of the EU-Australia and EU-New Zealand trade and investment agreements

This report aims at examining the economic, social, environmental and human rights impacts of possible bilateral EU-Australian and EU-New Zealand Free Trade Agreements. The quantitative analysis is based on the CGE model employed by DG Trade.

EU trade and investment ties with both countries are close, and mutual trade and investment barriers with Australia and New Zealand are on average low, with occasional peaks.

The CGE model suggest overall positive effects on macroeconomic variables, with sectoral variances. GDP, trade and investment are expected to increase for the EU as well as Australia and New Zealand. SMEs can benefit, government procurement will open for the respective other country’s enterprises. The model predicts positive long-term welfare effects for the both FTAs and limited but positive wage effects for workers in each trading partner. Consumers will largely benefit from proposed EU FTAs with Australia and New Zealand.

Both FTAs will have only a minor impact on the environment and will not diminish human rights in the EU, Australia and New Zealand in general. Effects on GDP of third countries, in particular LDCs seems to be slightly negative but negligible.

Client: European Commission - DG for Trade

Team leader: Andreas Freytag

Project manager, human rights analysis: Elitsa Garnizova

Economic, sectoral and horizontal analysis: Matthias Bauer, Christian Häberli, Philipp Lamprecht, Andrew Lang, Badri Narayanan & Susan Brown-Shafii

Environmental analysis: Stefania Lovo

Social analysis: Jean-Baptiste Velut & Badri Narayanan

Additional analysis and input: Catherine Grant Makokera, Peter Draper, Bregtje Kamphuis, Charles Xiao & Shiziu Zhang

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