UK-NZ finalise 'excellent' trade deal

Business groups have welcomed the finalising of a UK-New Zealand free trade deal on goods and services, which has been signed in London by the two nations' trade ministers.

Woman shaking a hand to symbolise a deal sealed

David Sapsted

2 March 2022

Aside from trade, the agreement will also allow freer movement for professionals - operating in such areas as law and financial services - between the two countries. And they will be able to take their families with them.The UK government also sees the deal, which was agreed in principle last October, as a step towards its application being accepted to join the 11-nation, Asia-Pacific trade bloc, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which New Zealand was a founder member.Britain's International Trade Secretary Anne-Marie Trevelyan said the deal would not only enhance trade between the two nations but also represented “a vital part of our plan to build new trade routes for services, which the UK excels at, and to re-focus Britain on the faster-growing parts of the world in the Asia-Pacific region, including accession to CPTPP".Trade between the two countries was worth £2.3 billion in 2020 and, according to the government in London, will now “increase by almost 60 per cent, boosting our economy by £800 million and increasing wages across the UK”.

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Marco Forgione, director-general of the Institute of Export & International Trade, described the signing of the agreement as "excellent news for traders”, though he added that businesses would be keen to see further details, including about “flexible” rules of origin.“The need to demonstrate compliance with rules of origin is a big reason why SMEs often do not access the tariff benefits of trade deals,” he said. “If this deal can streamline that process, then it will be especially welcome.”William Bain, head of trade policy at the British Chambers of Commerce (BCC) welcomed the agreement as it would mean zero-tariff trade for UK exporters with customers in New Zealand when the agreement comes into force early next year."It will also be easier for SMEs to access the New Zealand market as paperwork and red tape are reduced through modern provisions on digital trade," he said.
“We also welcome the opportunities for business travel and being able to provide services in New Zealand on an equal footing together with a new entry route to facilitate this.“The agreement will also boost trade in environmental goods and services - essential for the transition to Net Zero."The one sector in the UK unimpressed with the deal was the farming community, who fear it could lead to the country being flooded by cheap meat exports from New Zealand.Minette Batters, president of the National Farmers' Union, said: "The government is now asking British farmers to go toe-to-toe with some of the most export-orientated farmers in the world.“I have consistently pointed out that the real risk to UK farmers from the government’s approach to trade deals is not the individual deals themselves but the cumulative impact of each deal when added together.
"UK farm businesses face significantly higher costs of production than farmers in New Zealand, and margins are likely to tighten further in the face of rising input costs, higher energy bills and labour shortages."After the signing in London, New Zealand's Trade and Export Growth Minister Damien O'Connor headed for Brussels in a bid to finalise a free trade agreement with the European Union.