New Zealand trade deal will 'refocus Britain on the dynamic economies of the Asia-Pacific'

Thu 21 Oct 2021
Posted by: Noelle McElhatton
Trade News

Prime minister Boris Johnson and New Zealand PM Jacinda Ardern have signed a free trade deal between Britain and New Zealand to cut red tape and boost exports between the two countries.

The leaders met over video yesterday to agree in principle a deal that has been 16 months in the making and represents the UK’s second bespoke post-Brexit trade deal. 

The government announced that the comprehensive trade agreement would simplify trade, end tariffs on UK exports, and create new opportunities for tech and services companies, while making it easier for UK professionals to live and work in New Zealand.

The government hopes the deal will help encourage UK membership of Asian trade bloc the CPTPP. 

‘Strengthening Indo-Pacific ties’

“This is a great trade deal for the United Kingdom, cementing our long friendship with New Zealand and furthering our ties with the Indo-Pacific,” Johnson said. “It will benefit businesses and consumers across the country, cutting costs for exporters and opening up access for our workers.”

International trade secretary Anne-Marie Trevelyan added: “It is a vital part of our plan to level up the country: slashing costs and red tape for exporters, building new trade routes for our services companies and refocusing Britain on the dynamic economies of the Asia-Pacific.”

Trade between the two countries is worth about £2.3bn at present and will grow under the deal, the government predicts.

In detail: UK export benefits

Tariffs of up to 10% will be removed on UK goods including clothing, ships and bulldozers, and on New Zealand goods including wine, honey and kiwi fruits, the BBC reports.

However one of the deal’s greatest opportunities will be in facilitating UK businesses to sell more services to New Zealand.

A final-hour refusal by New Zealand to improve its offer on services delayed talks, according to people familiar with the talks.

The deal is now expected to offer similar provisions on areas like business travel to the Australia agreement, the Independent says. Provisions easing travel requirements for services suppliers working in New Zealand are a first for the country its trade deals.

This will create new opportunities for tech and services companies, while making it easier for UK professionals such as lawyers and architects to live and work in New Zealand, the government says.

Trade surplus

According to the Department for International Trade, services accounted for 40.8% of all UK exports to New Zealand in the four quarters to the end of Q1 2021, worth £517m.

While the UK had a trade deficit in goods with New Zealand of £90m in that period, a services surplus of £424m gave the UK an overall trade surplus of £334m.

The top five service types exported from the UK to New Zealand in the four quarters to the end of Q1 2021 were:

• Insurance and Pension (£158 million or 30.6% of all UK services exported to New Zealand)

• Travel (£76 million or 14.7%)

• Financial (£61 million or 11.8%)

• Telecommunications, computer and information services (£61 million or 11.8%)

• Intellectual property (£52 million or 10.1%)

Farmers unhappy

Farmers leaders are worried that the deal, like that with Australia, could lead to unfair competition for British farmers UK as it will phase out quotas on New Zealand lamb, beef and dairy exports, reports the Times

Reuters reports National Farmers’ Union president Minette Batters, who said: “The government is now asking British farmers to go toe-to-toe with some of the most export-orientated farmers in the world, without the serious, long-term and properly funded investment in UK agriculture that can enable us to do so.”

Preserving the Haka

However, according to the Guardian, the deal does protect the Māori haka with a commitment by the UK to “identify appropriate ways to advance recognition and protection of the haka Ka Mate”.