2021 has been another challenging year for New Zealand’s export and trade sector. However, despite Covid-19 there were some remarkable achievements and positive outcomes. Here we highlight some of those major milestones including a review of the recently signed FTA between the UK and New Zealand.
Looking back over the past 12 months, without doubt the highlight for New Zealand’s export businesses was the signing of the Free Trade Agreement with the UK on October 20th.
It will give Kiwi exporters real opportunities for growth, investment and diversification, and post-Brexit, the FTA will finally allow them to compete on a level playing field.
In the past New Zealand has faced high tariffs and restricted quota access on a number of goods when exporting to the UK – notably honey, seafood products, wine, onions, kiwifruit, apples and sheep meat. In other cases trade in products of global export interest to New Zealand have been significantly constrained due to high tariff barriers – for example, beef and dairy exports.
But once the FTA is fully implemented, when the tariffs on 98 percent of New Zealand products entering the UK are eliminated, it will deliver an estimated NZ$37 million in tariff savings alone on current trade volumes. Trade is expected to be fully liberalised after 15 years.
New Zealand has also secured the removal of other significant, administratively burdensome non-tariff barriers.
The UK-NZ FTA will provide new guarantees of market access and more certainty in-market for New Zealand’s services exporters, investors, and for Kiwi businesses wanting to access the UK’s government procurement market. There will also be increased cooperation and commitments in the area of digital trade to assist our growing tech sector.
Protecting and promoting Māori interests in this free trade agreement has been a priority for New Zealand throughout the negotiations too. This FTA recognises the unique status of Te Tiriti o Waitangi and includes New Zealand’s Treaty of Waitangi exception. It will include an indigenous chapter that will create a platform for cooperation on a range of issues important to Māori, and will reflect Māori interests in key areas across the agreement, such as in the intellectual property and trade and environment chapters.
However, the FTA is far from a one-way street when it comes to benefits.
British exporters will welcome the removal of tariffs of up to ten percent on goods such as chocolate, gin, buses, motorhomes, caravans and clothing. The UK’s Department of International Trade says the new trading terms could help British exporters gain an advantage over international rivals in New Zealand’s import market, which is expected to grow by 30 percent by 2030.
The deal will provide benefits for people and businesses right across the UK – from Edinburgh’s financial and insurance services companies, to Welsh auto companies that exported £3.4 million of road vehicles to New Zealand last year, and to Northern Ireland’s textile producers who will also benefit from the removal of tariffs of up to ten percent.
Not surprisingly, initial reaction in the UK was not totally favourable towards the FTA. Ashley Miln, associate director at the Rochester PR Group, headquartered in London, says there has been healthy debate in the British media.
This is an extract of the chapter. You can buy a print copy of the handbook here or a digital copy here
