Rt Hon Winston Peters Deputy Prime Minister Minister of Foreign Affairs Minister for State Owned Enterprises Minister for Racing Sam Sachdeva sam.sachdeva@newsroom.co.nz Dear Sam Sachdeva, Thank you for your email of 24 November 2017 in which you request the following under the Official Information Act 1982: “All briefings, reports, aide memoirs and memos produced or received by the Minister or his office regarding a free trade agreement with the Russia- Belarus-Kazakhstan Customs Union." Attached is the document relevant to your request. Some portions of the document are withheld under the following sections of the Act: © s6(a):; to avoid prejudicing the international relations of the New Zealand Government; + 6(b)(i) to protect the passing of information from another government on a confidential basis; * 6(b)(i); to protect the passing of information from an international organisation on a confidential basis; * s6(e)(vi): to avoid damage to the New Zealand Economy by the premature disclosure of decisions relating to entering into of overseas trade agreements; and * s9(2)(a): to protect individuals’ privacy. Where the information has been withheld under section 9 of the Act, no public interest in releasing the information has been identified that would be sufficient to override the reasons for withholding it. TB sc2aer7e7o1 EB Private Bag 16041 Parioment Buldings: Welington 6160, New Zealand — EJ woeters@minstersgovtnz | buohivegovtnePage 2 of 2 Information relevant to New Zealand's trade relationship with Russia is also available in the briefing | received following the formation of the new Government in the area of Trade and economic issues: https: /www.beehive.govt.nz/feature/briefings-incoming- ministers-foreign-affairs-security. You have the right under section 28(3) of the Act to seek a review of this response by the Ombudsman. Yours sincerely Rt Hon Winston Peters Minister of Foreign AffairsNEW ZEALAND FOREIGN AFFAIRS &TRADE 20 November 2017 > Minister of Foreign Affairs For actionby 24 November 2017 Minister for Trade and Export Growth For actionby 24 November Z 7 Russia Relationship __ BRIEFING General Purpose PURPOSE To provide advice about the RO Russia, 6(a), s6(e)(v) WY Recommended refensio© v 66a) SS) se by 29 November 2017 @ » r information by 29 November 2017 YN ‘or information by 29 November 2017 DIVISION WORK PHONE MOBILE PHONE, Manager Europe Division §9(2)(2 Lead Negotiator Trade Negotiations. Division Minister’s Office commentsPage 2 of 10, Russia Relationship Key points «The Coalition Agreement includes a commitment to “work towards a Free Trade Agreement with the Russia-Belarus-Kazakhstan Customs Union’. Ss oye c * Most Western countries, including the EW av} htifos jancial and economic sanctions against Rus: i Crimea and support for pro-Russian serait gain in place and are tied to the full implementation ents on Ukraine, In the import of agricultural ‘to i(fGoke Sel sanctions in the absence of a UN equit Ru ised other means to signal concern at. ion tional law. This included suspending FTA Russ)>Belarus and Kazakhstan. We also refrained from e Russian import bans against the EU and others. ‘A interests in Europe are with the EU and, when it is in a sgotiate, the UK. B5(@), s6(6) «© z the year to June 2017 our goods and services exports to the EU totalled NZ$8.2 billion, while goods and services exports to Russia were NZ$345 million.) «At the same time, many EU member states are increasing their economic ‘engagement with Russia, including through high level visits, while continuing to maintain sanctions against certain sectors of the Russian economy, and remaining subject to Russian import bans. 66(a), s6(b){i «5 Russia has banned New Zealand beef, introduced regulations which effectively prevent apple and stonefruit exports, and maintains restrictions on certain types of dairy products.C Page 3 of 10 Russia Relationship Russia is currently the third largest global importer of dairy products and the seventh largest importer of beef. It is implementing a policy targeting self-sufficiency in food by 2020 and is seeking to reduce imports of agricuttural products. ¢ The Eurasian Economic Union superseded the Customs Union in 2015. Its ‘competencies do not cover the full range of FTA interests,66(2) _ NG aa Soe ©) SO SS oe or SPage 4 of 10 Russia Relationship Recommendations Itis recommended that you: 1 Note the issues that will need consideration in association with Yes/No moving towards re-opening FTA negotiations with Russia and its economic partners; 2 Sela), s6(evi Yes /No imports, non-listing of new meat, dairy and fish est ¢ restrictions on apples, stonefruit and various dai ies; \ 3 Note that officials continue to seek resolution of a range Gar AK access Issues with Russia, including a ban on New G y) eS and W de 4 ease ui) ~ O) (O) eso WE \S Oo ~ \> CNP? WY \S C Sviston Peters Hon David Parker @ ter of Foreign Affairs Minister for Trade and Export GrowthPage 5 of 10 Russia Relationship Report 1 2. The Coalition Agreement notes the intention to work towards a Free Trade Agreement (FTA) with the Russia-Belarus-Kazakhstan Customs Union, which has now been subsumed into the Eurasian Economic Union. This submission provides advice on issues which will need to be addressed as part of that process. Our immediate FTA focus in Europe has been the long term effort to obtain a mandate for negotiations with the European Union (EU! Once it is in a position to@, so, we will also look to negotiate with the UK. f6(a)} A A SS forces infiltrated Crimea, a yoccupation, and Russia subsequently (3! part of Russia. Pro-Russian separatists in Sntlict with the Ukrainian military with support, ussia. Sporadic conflict continues. One of the vided by Russia is likely to have been used to shoot down Flight MH17. Some 10,000 people have died; 23,500 have lateral re-wrting of part of the post-Cold War territorial settlement in ope caused deep disquiet in Europe and among countries committed to the international rule of law. The UN Security Council was unable to consider sanctions against Russia, as Russia is a veto-holding power. The EU, US, Canada, Australia and Japan introduced economic and financial sanctions against the Russian state-owned banking, defence and cillgas exploration sectors. They also applied visa and asset sanctions against individuals associated with destabilising Ukraine. Separate sanctions prevent business with Crimea while Russia exercises authority there. All these Ukraine-related sanctions remain in place. The US has added further sanctions in respect of Russian interference in the US Presidential elections. EU sanctions are reconsidered every six months, and will next be considered later this year. The EU and US have stated that their sanctions will remain in place until Russia has met its side of the undertakings in the Minsk Agreements ‘These Agreements were negotiated in 2014 and 2015 and seek a politicalPage 6 of 10 Russia Relationship settlement in eastern Ukraine. None of the requirements has been met to date, not even for a lasting ceasefire, 6. Russia subsequently imposed agricultural import bans on the countries which had applied sanctions against it. 56(a)) 7. Ba) 8. Trade in other goods and services outside there is regular dialogue on trade (and, countries and Russia. In of bil onomic and trade 9. There has been a significant ia b discussions by many mber-state: Bast year with Russia, (a), s6(6) A e!EU FTA partners have either concluded agreements aR its-Eurasian Economic Union partners (Viet Nam) or ate in negati ingapore). 1 es 11. New Zealand cannot impose economic sanctions unless required by the UN Security Council, but we took action to signify our concern at the violation of international law and to show solidarity with like-minded partners. This included ‘@ unanimously supported motion in Parliament; support for a UN General Assembly resolution condemning Russian actions; and suspending well-advanced FTA negotiations with the then Russia-Belarus-Kazakhstan Customs Union. We also imposed travel bans, under provisions of the Immigration Act exercised by the Minister of Immigration, on certain Russian and Ukrainian individuals associated with destabilising Ukraine. The travel bans remain in place and FTA negotiations have been suspended since March 2014. 12, While New Zealand was not targeted by the Russian agricultural import bans, the Government sought to discourage New Zealand companies fromPage 7 of 10 Russia Relationship supplanting sanctioned EU and other competitors on the Russian market and refrained from proactive work to enable New Zealand companies to take advantage of this situation. $6(a New Zealand dairy trade was indirectly but significantly affected because of the displacement of EU product away from the Russian market to other international markets to which New Zealand exports. 13. ela} Jpléd with a domestic drive for import substitutio loscow’s ambition is for Russia to be largely, all food products other than exotic produ i Sm C rent figures show that Russia is the third largest importer of dairy products, ))Mbehind China and the US; the largest importer of butter (and New Zealand is the _ second biggest supplier); and the seventh largest importer of frozen beef. $6(a)| New Zealand exports to Russia: trade access problems 17. Although work on the FTA has not proceeded since early 2014, New Zealand trade has continued with Russia where circumstances have allowed. New Zealand exports to Russia experienced a marked downturn in 2014 and 2015. 5G: Russian restrictions on Fonterra products from 2013-2016 also had a significant impact (see below).Page 8 of 10 Russia Relationship 18. Since late 2016, dairy exports have recovered to around historically normal levels, although Russian restrictions continue to affect the dairy sector and New Zealand beef imports are currently banned. * Total New Zealand goods exports to Russia were valued at NZ$221 million in 2016. The main items were dairy, meat, food ingredients, fruit and fish. * Export of dairy products jumped from NZ$44.9 million in 2015 to NZ$144.9 million in 2016. Specific trade access difficulties 19. The Russian authorities apply sanitary and phytosanitary’ jons § excess of international norms, and once restriction: rg Mpgbedd on iy they can prove hard to remove. 20. In 2013, the Russian veterinary authorities i 1g the import of most Fonterra dairy ps Protein, Concentrate incident (concer, jut botulism contamination). Russian authorit plants/products in 2016, butather the export of Fonterr and ingredients, eX sig SS) ‘and fish companies which were able to export finuseO do so, but some new entrants remain excluded {Wely. This is because the Russian veterinary authorities | Russian/EEU audit of New Zealand's official controls of ;. Despite repeated invitations since 2013, Russian offic ve 22. In February 2017, Russia banned imports of New Zealand beef and beef offal, because of claims that banned substances had been detected in some consignments. 6(a)) 23. Restrictions also affect some exports of fish products and the export of apples and stonefruit is affected by new phytosanitary regulations effectively preventing their export to Russia. 24. Progress is slow in resolving these issues $6(a)]Rui Page 9 of 10, issia Relationship a) The Eurasian Economic Union 25. 7H GS 29. The Eurasian Economic Union (EEU) — superseded the Russia-Belarus-Kazakhstan Customs Union in January 2015. It has five members: in addition to the Customs Union members it also includes-Armenia and Kyrgyzstansé(a ‘The EEU has already signed an FTA with Vi ‘Singapore, Israel, Serbia and Iran, and és cooperation agreement with W Gia), SF/ #6(a), s6(e)(vi} 6(a), sefeyva)Page 10 of 10 Russia Relationship + 6a), see) .