The "gold-standard" agreement will unlock "unprecedented access" to the UK market
New Zealand Prime Minister Chris Hipkins has announced that New Zealand's Free Trade Agreement (FTA) with the UK will enter into force on 31 May, unlocking "unprecedented access" to the UK market.
The agreement is expected to increase New Zealand's GDP by up to $1bn and expand its goods exports to the UK by more than 50%. From day one, 99.5% of current exports will enter the UK duty-free through tariff elimination and duty-free quotas. The deal will cut costs for exporters, create opportunities for New Zealand businesses to grow and diversify their trade, and help tackle rising living costs by delivering quality, price-competitive UK imports.
"This is a gold-standard FTA, reflecting the close relationship between our two countries. The market access outcomes are among the very best New Zealand has secured in any trade deal," Hipkins said.
Minister for Trade and Export Growth Damien O'Connor said the deal is excellent news for the wine industry, which is currently the biggest exporter to the UK by value earning around $470m last year. The deal saves exporters at least $25m in tariffs immediately. The agreement also removes tariffs of up to 20% on seafood products.
In addition, prominent honey exporting regions like Northland, Hawke's Bay, and the Coromandel are expected to benefit from removing the $16 per $100 of product sent to market. New Zealand's dairy and red meat sectors will have significantly improved access to the UK's $3tn consumer market for the first time in nearly 50 years.
A dedicated Māori Trade and Economic Cooperation Chapter recognises the unique relationship between Māori and the British Crown as original signatories of Te Tiriti o Waitangi. It provides a platform for cooperation on areas of importance to Māori. The agreement also includes forward-looking environmental commitments for both parties, incorporating a specific provision on climate change and provisions to eliminate environmentally harmful subsidies.
"I'm proud of the work that's been done to finalise this agreement and excited for our exporters who are set to derive the benefits of it very soon," O'Connor said.
UK Prime Minister Rishi Sunak commented, "The entry into force of our new trade deal marks a new chapter in the great friendship between our two countries."
In addition to the early entry into force of the FTA, the upgraded Working Holiday Scheme will take effect 29 June in the UK and 1 July in New Zealand. Hipkins said, "Working holiday makers play a vital role in the New Zealand economy. We need their skills to meet workforce demand in industries like tourism, hospitality, agriculture and horticulture."
