Image source: gov.uk
The UK has finalised a free trade deal on goods and services with New Zealand after reaching agreement in principle last October.
The UK government sees the deal as a fillip to UK small businesses, services exports and another step towards the UK’s much-desired accession to the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) trade bloc.
International trade secretary Anne-Marie Trevelyan described the deal as “a vital part of our plan to build new trade routes for services, which the UK excels at, and to refocus Britain on the faster-growing parts of the world in the Asia-Pacific region, including accession to CPTPP, a vast free trade area … with a joint GDP of £8.4 trillion in 2020”.
The UK-NZ trade relationship was worth £2.3 billion in 2020, with the UK government estimating this will now “increase by almost 60%, boosting our economy by £800 million and increasing wages across the UK”.
Tariff ‘elimination’
Under the new deal, tariffs will be eliminated on all 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 government said that smaller businesses – it estimates 5,900 UK SMEs already export goods to New Zealand – would find the NZ market “easier” to break into because of “modernised customs procedures, such as digital documents and customs clearance as quick as six hours”.
‘Flexible rules of origin’
The deal’s “flexible rules of origin…will give British exporters an advantage over international rivals” in the NZ market, whose imports are “expected to grow by 30% by 2030”.
Institute of Export & International Trade director general Marco Forgione congratulated the UK government on “achieving this deal so quickly – it is excellent news for traders”.
Further details
He added that traders would be keen to see further details, including about “flexible” rules of origin.
“The need to demonstrate compliance with rules of origin is a big reason why SMEs often do not access the tariff benefits of trade deals,” Forgione said. “If this deal can streamline that process, then it will be especially welcome.”
The government said other benefits would include UK professionals, such as lawyers and auditors, being able to work in New Zealand more easily, and bring their families with them
The deal has been signed by Trevelyan and NZ minister for trade and export growth Damien O’Connor.