Recent free trade developments to benefit New Zealand
On 28 February 2022, New Zealand signed a free trade agreement with the United Kingdom, providing New Zealand exporters with more favourable access to the UK market.
The UK was New Zealand’s seventh largest trading partner pre-COVID, with trade between the two nations exceeding $6 billion in 2019/20.
Once the free trade agreement (FTA) is fully implemented, tariffs will be eliminated on all New Zealand exports to the UK. On day one, duties will be removed on 99.5% of current New Zealand trade through a combination of tariff elimination and duty-free quotas.
The FTA is expected to boost New Zealand’s GDP by $700 million to $1 billion and result in local exporters saving approximately $37m annually on tariffs.
Key highlights of the FTA are as follows:
- Overall, 99.9% of New Zealand’s current horticultural trade will be duty free following the FTA coming into force, and 100% duty free within 7 years.
- 46% of New Zealand’s current fish and seafood trade will be duty free from day one, 99.5% within 3 years, and 100% duty free within 7 years.
- 60% of New Zealand’s current dairy trade will be duty free immediately on FTA coming into force, 99.5% within 5 years, and 100% duty free within 7 years.
The timeframes for elimination of tariffs on key products are as follows:
- Wine, honey, onions, kiwifruit and hoki:tariffs will be removed on day one.
- Apples and mussels: tariffs will be eliminated over 3 years.
- Butter and cheese: tariffs will be eliminated over 5 years.
- Beef: tariffs will be eliminated over 10 years.
- Mutton: tariffs will be eliminated over 15 years.
Both New Zealand and the United Kingdom are working to have the FTA come into force by the end of 2022.
PDF version: here.
This article was included in Edition 5 of our rural newsletter – Rural. which you can read here.