The UK and New Zealand have signed a new free trade deal that will remove trade barriers on a huge range of UK goods and services.
The deal is expected to increase the value of the two countries’ £2.3 billion trading relationship by 60%, adding £800 million to the UK economy and increasing wages for British workers.
Tariffs will be eliminated on 100% of UK exports to New Zealand, including current tariffs of up to 10% on clothing and footwear, 5% on buses, and up to 5% on ships, bulldozers, and excavators.
The deal was signed today by International Trade Secretary Anne-Marie Trevelyan and New Zealand Minister for Trade and Export Growth Damien O’Connor.
Negotiations were launched on 17 June 2020, before being agreed in principle in October 2020.
SME growth in focus
The deal focuses on providing easier access for UK small businesses to the New Zealand market.
Currently, 5,900 UK SMEs export goods to New Zealand, employing 233,000 people mainly in the tech, creative, and service industries.
Flexible rules of origin will also give British exporters an advantage over international rivals in the New Zealand import market, which is expected to grow by 30% by 2030.
Moreover, small businesses will be provided practical advice and support to find opportunities and connect with commercial partners in New Zealand.
The introduction of modern custom procedures – such as digital documents and up to six hours’ customs clearance – is expected to ease the two countries’ trading relationship.
Similarly, UK professionals such as lawyers and auditors will be able to work in New Zealand more easily, and will be able to bring their families with them.
UK trade policy and strategy
The deal marks another step in the UK’s Build Back Better strategy after the pandemic, and is part of the country’s plan to build new trade routes in the Asia-Pacific region, including accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
In a press statement, the Department for International Trade said the deal is the most advanced agreement New Zealand has signed with any nation except for Australia.
It is one of the greenest UK deals, confirming commitment to the Paris Agreement and net zero.
It will liberalise tariffs on the largest list of environmental goods in any free trade agreement to date, and will encourage trade and investment in low-carbon services and technology.
Anne-Marie Trevelyan, international trade secretary, said: “Like all our new trade deals, it is part of a plan to build a network of trade alliances with the most dynamic parts of the world economy, so we set the UK on a path to future prosperity.
“This deal will slash red tape, remove all tariffs, and make it easier for our services companies to set up and prosper in New Zealand.”