New Zealand reaches ground breaking FTA
Dairy, honey, meat, onions and wine are some of the big winners of New Zealand’s free trade agreement with the UK. From the day the FTA comes into force 97% of tariffs on all exports will be lifted, in an agreement estimated to be worth $1 billion to New Zealand GDP.
The deal, agreed to in principle (with the hope of concluding final negotiations by next year) will give New Zealand exporters unprecedented access to the UK market. For key products where tariffs will be removed over time (such as meat) sizable duty-free quotas have been secured which will cover current exports and allow for significant growth in trade. The FTA also includes provisions covering environmental concerns, animal welfare, Te Tiriti o Waitangi, telecommunications and digital trade, investment, intellectual property, and efforts to combat gender inequality and modern slavery.
The agreement is extensive and covers a number of areas, but here are five key areas that will provide a big boost for Kiwi export businesses.
- The UK’s market access commitments for services exporters and investors are among the best it has agreed with any FTA partner. The UK has also committed to extend any future market opening agreed in future FTAs to New Zealand.
- The UK has agreed to extend visa commitments for business people, adding more sectors and categories to the existing access under the WTO.
- Modest improvements have also been made in government procurement, with the UK expanding the types of service contracts New Zealand providers can bid for.
- Non-tariff barriers have also been tackled. For example, the FTA will recognise a number of New Zealand wine-making practices and address burdensome labelling and certification requirements faced by New Zealand’s wine makers.
- Many other outcomes will make trade with the UK easier, less costly, and more accessible for small businesses. This includes streamlined customs procedures and provisions that will facilitate digital trade and promote connectivity between New Zealand and the UK.
The agreement is also breaking new ground in a number of other areas that will boost Aotearoa’s productivity, including
- Reflecting New Zealand’s Trade for All agenda, we have achieved leading edge commitments on trade that are sustainable, inclusive and reach many New Zealand communities. This includes outcomes in areas such as trade and labour, as well as a chapter on trade and development, and new chapters on trade and gender equality to support women’s economic empowerment, and consumer protection. A chapter on digital trade will support the growth of New Zealand’s tech exports and promote cooperation in regard to new technologies.
- The environment chapter includes ground-breaking commitments for both countries. The agreement is New Zealand’s first bilateral trade deal to include specific commitments on climate change and will contain provisions eliminating environmentally harmful subsidies. This includes commitments to take steps to eliminate harmful fossil fuel subsidies, and to prohibit fisheries subsidies which lead to overfishing. The environment chapter will also prioritise the elimination of tariffs on at least 268 environmentally beneficial products – the largest environment goods list ever agreed in an FTA.
- The agreement recognises the unique and historical relationship that exists between Māori and the British Crown – as original signatories of Te Tiriti o Waitangi/the Treaty of Waitangi. In addition to the inclusion of New Zealand’s Treaty of Waitangi exception, Māori economic and trade interests were prioritised in negotiations and are reflected across the agreement. This includes a dedicated chapter that will create a future platform for cooperation on a range of issues important to Māori.