The New Zealand government has signed a comprehensive and high quality Free Trade Agreement (FTA) with the United Kingdom (UK) which will eliminate many existing tariffs.
On day one, 99.5% of current New Zealand trade will enter duty-free, thanks to a combination of tariff elimination and duty-free quotas. Quotas will increase over time and then be removed.
Customs duties on wine will be eliminated as soon as the FTA comes into force, as well as customs duties on honey, onions and kiwis.
Tariffs will be eliminated over 3 years for apples with a significant new duty-free quota for off-season exports for the first 3 years.
Overall, 99.9% of New Zealand’s horticultural trade will enter the UK duty-free when the FTA comes into force, and 100% within 7 years.
Fish and Seafood Highlights
46% of current New Zealand fish and seafood and trade will enter the UK duty free when the FTA comes into force, 99.5% within 3 years and 100% within 7 years.
Customs duties will be eliminated upon entry into force of the FTA on hoki and on mussels after 3 years.
60% of New Zealand’s current dairy trade will enter the UK duty free when the FTA comes into force, 99.5% within 5 years and 100% within 7 years .
Tariffs will be eliminated over 5 years for butter and cheese, with significant new duty-free quotas that will allow trade to grow during the transition period until all tariffs and quotas are eliminated .
Many other dairy products will also become duty free upon entry into force, with the remainder phased out over 3 or 7 years.
Customs duties will be eliminated after 10 years for beef. A product-specific safeguard can then apply up to year 15.
Customs duties will be eliminated after 15 years for sheep meat.
Significant new quotas will be established for both products, allowing trade to expand during the transition period until all tariffs have been eliminated.
Services and investment
Services commitments will help facilitate and provide certainty of access and regulatory conditions for service exporters. Market access commitments build on and supplement those each country has made under the WTO’s General Agreement on Trade in Services.
The investment provisions incorporate modern investment protection rules similar to those contained in other recent FTAs, providing certainty and stability in market access for investors from both countries. This will help create the conditions for further growth and development of two-way investment between New Zealand and the UK.
The FTA includes an innovative chapter on Maori Trade and Economic Cooperation which recognizes the unique context and special relationship between Maori and the British Crown being the original signatories to the Treaty of Waitangi (te Tiriti o Waitangi). It also promotes cooperation between the Parties to the Agreement to enable and advance the economic aspirations and welfare of Maori.
The FTA also includes the New Zealand exception to the Treaty of Waitangi which ensures that nothing in the FTA would prevent the New Zealand government from meeting its obligations to Maori, including under the Treaty of Waitangi (te Tiriti o Waitangi).
The FTA includes the most ambitious commitments New Zealand has ever negotiated on trade and the environment, including commitments to ban subsidies that increase fishing capacity and to take action to eliminate subsidies harmful to fuels, as well as a specific article on climate change.
The environment chapter will also prioritize the elimination of tariffs on 293 environmentally beneficial products – the longest such list agreed in an FTA to date.
The government is aiming for the deal to enter into force by the end of 2022, after both partners ratify the deal through their respective parliaments.