If you missed Prime Minister Chris Hipkins’ recent announcement on our new trade agreement with the United Kingdom, don’t worry – we’ve got you covered.
Here's a quick overview of what it means for exporters, farmers and growers, and how it will help to boost New Zealand’s economy.
Our historic record on trade, including unlocking access to some of the world’s biggest and most lucrative markets, is providing greater opportunities for New Zealanders to get ahead.
While overseas this week, the Prime Minister announced that we’re bringing forward our trade agreement with the United Kingdom.
This is great news, particularly for local exporters, farmers and growers, as the deal is gold-standard. It’s expected to boost our economy by up to $1 billion a year, with New Zealand exports to the UK estimated to grow by over 50%.
From day one the deal will cut costs for Kiwi exporters, saving them approximately $37 million a year in tariff elimination alone. In fact, 99.5% of current exports will enter the UK duty-free through a combination of tariff elimination and duty-free quotas.
It will also unlock opportunities for Kiwi businesses to boost and diversify their trade – helping them to succeed and to grow jobs and wages. On top of this, it will help to bring down the cost of living by delivering price-competitive UK imports.
The FTA is great news for our wine industry, which is currently our biggest exporter to the UK by value earning around $470 million last year. The deal saves exporters at least $25 million in tariffs immediately. The deal also removes tariffs of up to 20 percent on seafood products.
Major honey exporting regions like Northland, Hawke's Bay, and the Coromandel will benefit from the removal of the $16 per $100 of product sent to market.
Our dairy and red meat sectors will have significantly improved access to the UK’s NZ$3 trillion consumer market for the first time in nearly 50 years. We’ve secured excellent tariff-free quotas for our dairy and meat producers, which will grow until being fully liberalised by Years 5 and 15 respectively.
Securing high-quality trade agreements
The last few years have highlighted the need for New Zealand to have a range of trading partners to build resilience to global economic shocks. For New Zealanders to have economic security it’s essential that we deliver high-quality free trade agreements.
We’re committed to providing Kiwi businesses with as many trading opportunities as possible, and our agenda has huge momentum.
Since taking office in 2017, we’ve secured or upgraded seven Free Trade Agreements.
- This has resulted in increased access into 20 markets with a combined population of 2.8 billion customers and GDP of US$55 trillion – approximately 63% of global GDP.
- The increase in market access we’ve negotiated means 73.5% of our global exports are now covered by a free trade agreement, up from around 50% in 2017.
- Food and fibre export revenue has grown by 39% from $38.2 billion to $53.1 billion, since 2017
Growing the workforce
The decision to bring forward this UK trade agreement comes on top of the good news announced earlier this year that the new three year NZ UK Working Holiday Visas will come into force by July this year.
Working holiday makers play a vital role in the New Zealand economy. We need their skills to meet workforce demand in industries like tourism, hospitality, agriculture and horticulture.
With the changes to the Working Holiday scheme taking effect soon, we expect this to provide a boost to the interest from UK working holiday makers, providing additional support to the tourism and hospitality industries through winter as we host the FIFA Women’s World Cup from 20 July to 20 August.
There’s still more to do and we will continue positioning New Zealand globally as a great place to trade with and visit, as we work hard to support businesses and grow our economy.
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