News of a free trade agreement (FTA) between New Zealand and the United Kingdom has been welcomed by the business sector. Export tax on nearly all products will be wiped on day one of the historic agreement, providing a boost of almost $1 billion to New Zealand GDP and unprecedented access for New Zealand exporters to the UK market.
The innovative and meaningful FTA was announced this week with an unprecedented elimination of 97% of tariffs. Industry representatives welcomed the deal, calling it a game changer with significant benefits for local exporters of fish and seafood, honey, wine, onions, meat and dairy products. There are also provisions to improve business travel and work arrangements between the countries.
The FTA would eliminate tariffs on all UK goods into New Zealand, and tariffs on about 63% of NZ goods currently exported to the UK. Sheep meat and beef would still be subject to tariffs but have a quota that would increase each year for duty-free exports until the 15th year after the agreement, while butter and cheese would have tariffs reduced until the sixth year.
The agreement is expected to be finalised over the next few months and includes provisions for Te Tiriti o Waitangi, telecommunications and digital trade, investment, intellectual property, environmental concerns, animal welfare, and efforts to combat gender inequality and modern slavery.
The UK is a crucial market for some of our key exports, with two-way trade worth NZ$6 billion pre-COVID. Modelling shows New Zealand exports to the UK will increase by up to 40% and increase GDP by up to $970 million, saving exporters an estimated $37.8 million per year, as a result of the agreement.
New Zealand is the second country after Australia to secure an FTA with the UK post-Brexit.
