UK opens new doors for New Zealand exporters

Tim Michael, editor of Dynamic Export, discusses the benefits and opportunities that will flow for New Zealand businesses under the new UK-NZ trade pact …

An historic Free Trade Agreement (FTA) sealed recently by the UK and New Zealand governments marks a new era in trade relations between the two nations.  Businesses across New Zealand can

New Zealand Flag wooden sign with winery background
New Zealand Flag wooden sign with winery background

look forward to some exciting new trade opportunities.  After 16 months of negotiations, the new deal will provide New Zealand exporters with unprecedented access to UK markets on a broad range of products and services.

In a nutshell, it removes all tariffs and tackles barriers that had previously limited trade and opportunities between both countries.

New Zealand is the second country to secure a new free trade agreement with the UK post Brexit, following the recent trade agreement struck with Japan.  Prime Minister Boris Johnson’s focus on the region is part of 10-year plan to build stronger ties in the Indo-Pacific – and create stronger competition for China in the region.

New Zealand is the UK’s seventh largest trading partner.  UK trade with New Zealand is currently worth £2.3bn (NZD$4.4bn) a year but has the potential to increase by up to 30% by 2030, UK trade officials predict.  In recent years, New Zealand has become heavily reliant on China for trade, with more than 30% of total exports pouring into Chinese markets.

The UK, which has long shared deep cultural and trade ties with NZ, now offers businesses an attractive – and viable – alternative. It gives NZ exporters an opportunity to diversify and reduces the risk of the trade war now facing its Australian neighbour.

So, who are the big winners?

The FTA is great news for consumers and exporters in both countries.  But the biggest winners are without doubt New Zealand primary producers.  Under the new deal, tariffs on 97% of New Zealand’s existing exports to the UK will be eliminated.

This includes wine, honey, kiwifruit, onions, apples and a range of dairy products. Beef and sheep meat producers will be given greater access to UK markets. These primary industry sectors are the backbone of New Zealand’s economy.  As a bonus, tariffs will also be eliminated on most NZ industrial products.

In total, NZ exporters will save an estimated £19.7 million (NZD$37.8m) a year on tariff elimination alone.

Strong focus on sustainability

This FTA includes the most ambitious commitments New Zealand has ever negotiated on trade and the environment. Remarkably, it’s the first bilateral trade deal to include specific provisions on climate change.  Under the new deal, 260 “environmentally beneficial” products have been prioritised for tariff elimination – the largest environment goods list ever agreed.

NZ Prime Minister Jacinda Ardern describes the FTA as “one of our best deals ever. This deal will cut costs for exporters immediately, creates opportunities for New Zealand businesses to grow and diversify their trade, while boosting the economy as we recover from COVID-19,” she said in a recent statement.

UK Prime Minister Boris Johnson shares her enthusiasm.“This new trade deal is the cherry on the top of a long and lasting partnership between the United Kingdom and New Zealand,” he adds.

The PM says the agreement is a win-win, with a range of tariffs to be removed on a range of UK goods including clothing, ships and bulldozers. It also makes it easier for smaller UK businesses to break into the New Zealand market – as well as removing barriers for advanced tech and services companies.

And UK professionals such as lawyers and architects will be able to work in New Zealand more easily.

What are the benefits for NZ?

There are incredible gains for NZ exporters under the new arrangements. Besides immediate cost cuts, the FTA creates opportunities across the board for New Zealand businesses to grow and diversify their international trade.

The new agreement not only benefits New Zealand’s major primary producers and distributors, it’s a big winner for SME brands.

Global giants Fonterra Co-Operative Group and Goodman Fielder will now share a level playing field with smaller boutique dairy brands like Otago based Evansdale Cheese and Kapiti Fine Foods, producers of gourmet cheeses and yoghurts.  Similarly, major sheep and beef meat processors such as global food company Alliance Group Ltd, will share centre stage with smaller brands including Blue Sky Meats, Prime Range Meat and Ovation NZ Ltd.

The same applies to wine producers in flagship regions such as Marlborough, Central Otago and Hawke’s Bay. Boutique brands including Spy Valley Wines, Foxes Island and Zephyr can now enjoy the same access to the UK market as major brands like Cloudy Bay, Villa Maria Estate and Wither Hills.

Most importantly, it will ensure certainty for all New Zealand exporters. It also creates more investment opportunities in the UK for New Zealanders and allows young New Zealanders to develop their skills and work experience while travelling and living in the UK.

And work will begin immediately to extend and improve the existing New Zealand-UK Working Holiday-Youth Mobility scheme for the benefit of both nations.  Ms Ardern summed it up neatly when she said: “This deal serves New Zealand’s economy and exporters well as we reconnect, rebuild and recover from COVID-19 – and look forward into the future.”

Dynamic Export is a news and information service for Australian and New Zealand exporters. Established in 2002, Dynamic Export helps Australian and NZ companies to grow their business in international markets.  




Tim Michael
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Tim Michael is editor of Dynamic Export, a news and information service for Australian and New Zealand exporters. Established in 2002, Dynamic Export helps Australian and NZ companies to grow their business in international markets.