Sunday, April 14, 2024

It’s a date: UK FTA to begin 31 May

The Free Trade Agreement (FTA) between New Zealand and the UK will enter into force on 31 May, Prime Minister, Chris Hipkins has announced following a meeting of the nations’ Prime Ministers in London.

Mr Hipkins said the historic trade deal is set to unlock unprecedented access to the UK market.

“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,” Mr Hipkins said.

UK Prime Minister, Rishi Sunak said the new trade deal marked a new chapter in the great friendship between the two countries.

“This deal will unlock new opportunities for businesses and investors across New Zealand and the UK, drive growth, boost jobs, and most importantly build a more prosperous future for the next generation,” Mr Sunak said

Mr Hipkins said the agreement will save New Zealand exporters approximately $37 million per year in tariff elimination alone from day one.

“So the earlier than expected entry into force is a much-needed boost for our exporters right now,” he said.

“Securing improved trade access for New Zealand exporters is a foreign policy priority for me so it is incredibly pleasing to get the final leg of this FTA over the line and for our exporters to start benefiting from it by the end of this month.”

Mr Hipkins said the UK is New Zealand’s seventh largest trading partner and a crucial market for some key exports.

“Ultimately, all customs duties on all products will be eliminated through this FTA – and the vast majority of these will be removed on the very first day, providing a shot in the arm for exporters immediately,” he said.

“I want to thank Prime Minister Sunak for his commitment to the FTA and his support for bringing forward its benefits. Our two countries are incredibly close, and the FTA adds a new economic dimension to the bonds that unite us.”

Minister for Trade and Export Growth, Damien O’Connor said the agreement was expected to boost  New Zealand’s GDP by up to $1 billion, and expand New Zealand’s goods exports to the UK by more than 50%.

“From day one, 99.5% of current exports will enter the UK duty-free through a combination of tariff elimination and duty-free quotas,” Minister O’Connor said.

“This 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.

“The FTA is great news for our wine industry, which is currently our biggest exporter to the UK by value earning around $470 million last year. The deal saves exporters at least $25 million in tariffs immediately. The deal also removes tariffs of up to 20% on seafood products.

“Major honey exporting regions like Northland, Hawke’s Bay, and the Coromandel will benefit from the removal of the $16 per $100 of product sent to market.

“Our dairy and red meat sectors will have significantly improved access to the UK’s NZ$3 trillion consumer market for the first time in nearly 50 years. We’ve secured excellent tariff free quotas for our dairy and meat producers, which will grow until being fully liberalised by Years 5 and 15 respectively.

“A dedicated Māori Trade and Economic Cooperation Chapter recognises the unique relationship that exists between Māori and the British Crown as original signatories of Te Tiriti o Waitangi, and 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 article on climate change and provisions to eliminate environmentally harmful subsidies.

“I’m proud of the work that’s been done to get to this agreement finalised and excited for our exporters who are set to derive the benefits of it very soon,” Mr O’Connor said.

More information on the NZ-UK FTA, including information for exporters and the outcomes for each market, is available at www.mfat.govt.nz/nzukfta.

Latest Articles