London – New Zealand and the United Kingdom have agreed in principle to a historic free trade agreement, which should accelerate the covid economic recovery.
It should result in a boost of almost $1 billion to New Zealand GDP, unprecedented access for New Zealand exporters to the UK market.
UK will eliminate all tariffs on New Zealand exports, with over 97 percent being removed the day the agreement comes into force.
NZ exporters will save about $37.8 million a year on tariff elimination alone. Other key agreement highlights include:
- Elimination of tariffs on all honey, wine, kiwifruit, onions, a range of dairy and meat products, and most industrial products
- Significant increases for beef and sheep meat market access
- Working Holiday arrangements to be improved and extended
- The UK was New Zealand’s seventh largest trading partner pre-covid, with two-way trade worth $6 billion for the year to March 2020
- The market access package is among the very best New Zealand has secured in any free trade agreement
- Modelling shows NZ goods exports to the UK will increase by up to 40 percent
- Modelling shows NZ GDP increasing up to $970 million
- Tariffs will be eliminated from day one on hoki (export value $2.2 million), and on mussels after 3 years (export value $6.4 million).
- Tariffs will be eliminated after 5 years for butter (export value $1.6 million) and cheese (export value $500,000), with significant quotas that will operate and provide duty-free access for significant volumes of trade until all tariffs have been eliminated. Many other dairy products will also become tariff free
- The agreement will include the most far reaching commitments New Zealand has ever negotiated on trade and the environment in a free trade agreement
- It will include provisions addressing subsidies which are not only environmentally harmful but also trade distorting, including commitments to prohibit subsidies for fishing overfished stocks and to take steps to eliminate harmful fossil fuel subsidies.