Bruised by its divorce from the European Union, Britain is busy dating more, making new friends and reconnecting with old acquaintances.
Serenade with promises of cheaper cars, whiskey and pot, Australia was the first to sign a Free Trade Agreement (FTA) with the UK, but New Zealand is not far behind.
The opposition of the National Party was quick to criticize the Labor government for being too slow on a UK deal, but Prime Minister Jacinda Ardern responded ostentatiously by saying that New Zealand wanted “quality over speed”.
Importance of Australia deal also downplayed, rating agency Moody’s saying, “The economic impact of the trade agreement is negligible”. Others argued that the deal was more about demonstrating post-Brexit sovereignty than economic gain.
Yet it is undeniable that Britain needs to diversify its markets to compensate for the negative economic impacts of Brexit. New Zealand also wants to develop its trade after pandemic disruptions and diversify its commercial markets beyond China.
With a expected business in August, the big questions are: what is there really to gain for New Zealand, and what considerations will have guided the negotiations?
Much has changed since Britain joined the former European Common Market and cut the ropes of the colonial apron. New Zealand is now a different country and can make a deal on its own terms.
Priority 1: product
While Britain was once New Zealand’s most important trading partner in the 19th century, it now ranks sixth. Well behind China, Australia and (ironically) the European Union, trade with the UK was nonetheless worth nearly NZ $ 6 billion in 2019. But that’s not exactly a two-way street. .
While New Zealand has embraced free trade and removed many import tariffs, Britain still imposes tariffs on imports. So while UK motor vehicles attract very little tariffs (other than GST) in New Zealand, it remains prohibitive tariffs and quota restrictions on major New Zealand exports to the UK.
For example, beyond the limited quota volumes, UK tariffs on New Zealand butter and cheese are equivalent to 45% of product value, 16% on honey and up to 20% on seafood. The price on New Zealand wine ranges from £ 10 to £ 26 ($ 18 to $ 48) per liter.
Read more: UK-Australia trade deal isn’t really about economic gain – it’s about demonstrating post-Brexit sovereignty
Thus, New Zealand should expect nothing less for its exports than the gains that Australia has just achieved. While there are still many details to come on the Australia-UK FTA, it looks like UK quotas will increase and tariffs will drop rapidly over the next decade. According to some analyzes, it is effectively an elimination old trade barriers.
The same must be true for New Zealand primary products. There could be resistance from the UK agricultural sector, which has sounded the alarm that free trade could “could be the endFor farmers. This will not be the case, but the Australian FTA would have caused a “fierce rankIn Prime Minister Boris Johnson’s office.
Either way, settling for less than Canberra would be a national disgrace for New Zealand.
Priority 2: principle
The scope of the FTA must be broader than the mere exchange of products. For example, New Zealand is part of an international initiative to agreement on climate change, trade and sustainability.
The inclusion of the guiding principles of this agreement – removing tariffs on environmental goods, eliminating harmful fossil fuel subsidies and developing eco-labeling programs – should be a priority.
As New Zealand continues to improve its agricultural response to climate change and cruelty-free farming standards, this will help deflect any backlash against its exports. It also represents a competitive advantage, with New Zealand seen as using international trade to set standards for sustainability.
Read more: There’s a lot we don’t know about the UK trade deal we’re about to sign
Maori interests must be the other big priority in this area. After all, the Maori have a unique relationship with the British Crown, as it is Queen Victoria’s emissaries with whom the Treaty of Waitangi was signed.
As the emissaries of Elizabeth II (Victoria’s great-great-granddaughter) negotiate this latest milestone in the relationship, they must be fully aware of the importance and relevance of the Treaty to any new agreement, in especially with Māori-led business initiatives. .
Priority 3: people
Finally, the agreement must also concern people. Britain will seek to mitigate the reduced migratory flows caused by Brexit, and New Zealanders will be prime targets. Besides tourism potential, Britain will want Kiwi students, workers and entrepreneurs.
Maintaining and expanding British access to New Zealanders, however, must be reciprocal. Otherwise, New Zealand risks losing one of the few positive results from COVID-19, namely the “brain gain”Returning expatriates.
Read more: Australia-UK trade deal can help boost post-pandemic recovery
The so-called “one-time resetThe immigration system is at the heart of this, moving New Zealand away from its reliance on low-skilled workers to attract those with higher skills. Making New Zealand an attractive and viable option for Britain’s best and brightest should be a by-product of the FTA.
With formal negotiations concluded, the “quality” of the final agreement remains to be seen. But New Zealanders should expect a deal that appropriately recognizes the special relationship between the two countries.
More than that, New Zealand is no longer the junior partner. The reality is that for post-Brexit Britain a good deal for New Zealand is still a good deal.