On 1 March New Zealand signed a high quality, comprehensive free trade agreement (FTA) with the UK, one of the world’s largest economies and an important, long-standing partner.
The historic FTA sealed a deal agreed in principle last year, which will see the UK eliminate all tariffs on New Zealand exports, with duties removed on 99.5% of current trade from entry into force. It’s expected to boost New Zealand’s GDP by up to $1 billion and save local exporters roughly $37m each year on tariffs.
The UK is a crucial market for some of our key exports, with two-way goods and services trade worth NZ$6 billion pre-COVID.
The announcement of a new trade deal with the UK is great news, says ExportNZ Executive Director Catherine Beard. She says NZ companies exporting goods to the UK have worked for a long time under costly tariff rules and will welcome the agreement, which will remove almost all tariffs by the end of the year. “Our half-billion dollar wine exports will be worth significantly more. Dairy and meat exports will be free from tariffs for the first time in 50 years. And our exporters will find it easier to do business in the UK under new rules for movement of business people.
“Exporters will be congratulating Minister of Trade Damien O’Connor and the officials who worked on the deal through Covid-19, along with their UK counterparts,” Beard said.
With the Agreement now signed, both sides are working to bring the FTA and its benefits into force as soon as possible, ideally by the end of 2022.
The vast majority of customs duties will be removed entirely the day the FTA comes into force, including wine, honey, onions, kiwifruit, a range of dairy products, and most industrial products.
A small number of New Zealand products will be liberalised over a longer time frame of up to 15 years but with significant new duty-free quota access provided in the interim. This includes for apples (3 years), cheese and butter (5 years), and beef and sheep meat (15 years)*.
The NZ-UK FTA will provide opportunities for businesses large and small to grow, invest and diversify. The NZ-UK FTA recognises the unique status of Te Tiriti o Waitangi, including in the preamble of the Agreement, and includes a Māori Trade and Economic Cooperation chapter that will create a platform for cooperation on a range of issues important to Māori. The FTA also reflects Māori interests in key areas across the agreement, such as in the intellectual property and trade and environment chapters. It also includes New Zealand’s Treaty of Waitangi exception, which enables the New Zealand Government to take measures it deems necessary to accord more favourable treatment to Māori regarding matters covered under the Agreement, including in fulfilment of its obligations under the Treaty of Waitangi.
The FTA features the most far-reaching trade and environment provisions New Zealand has ever negotiated, including commitments to eliminate fisheries subsidies, to take steps toward eliminating fossil fuel subsidies, and to promote sustainable agriculture. It prioritises the elimination of tariffs on over 290 environmentally beneficial products – the largest such list agreed in any FTA to date. It also underlines the urgent need to address climate change, and commits to working together to do so.
* Beef access is provided through a duty-free quota for 10 years, followed by a product-specific safeguard until year 15. All trade is duty-free below the safeguard trigger.
