21st October 2021 By Paul Yandall | firstname.lastname@example.org | @foodtickernz
New Zealand could see a $1bn increase in GDP after agreeing in principle with the United Kingdom the details of a historic free trade agreement, says prime minister Jacinda Ardern.
New Zealand becomes the second country to secure an FTA with the United Kingdom post-Brexit, following Australia in June this year.
The deal is expected to substantially cut costs for exporters and businesses with the elimination of tariffs alone worth almost $38m, as well as provide greater access to the United Kingdom’s market.
“Prime minister Boris Johnson and I spoke yesterday [Wednesday] evening to mark this historic moment and its importance in forging a stronger and more dynamic future relationship between two close friends and partners,” Ardern 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.
“It’s one of our best deals ever and secured at a crucial time in our Covid recovery.”
Highlights of the agreement include:
Ardern said the deal would cut costs for exporters and create opportunities for New Zealand businesses to grow and diversify their trade.
“There are incredible gains for our exporters, including the immediate elimination of all duties on 97% of New Zealand’s existing exports to the UK, including wine, honey, onions, a range of dairy products, and most industrial products – which once fully implemented is expected to save exporters $37.8m per year based on current export volumes,” the prime minister said.
“Beef volumes will increase from 12,000 tonnes to 60,000 tonnes, and for sheep meat they will rise from 149,205 tonnes to over 164,000 tonnes, with free market access after 15 years – putting more money back into the pockets of our farmers while presenting them the opportunity for further growth.”
The UK was New Zealand’s seventh-largest trading partner pre-Covid, with two-way trade worth nearly $6bn to March 2020.
Pre-Covid estimates also projected that New Zealand goods to the UK would increase up to 40% and that New Zealand GDP would benefit up to $970m due to the FTA.
The government said the FTA in principle sets out the key elements of the trade deal with the UK, with the text to be finalised over the coming months.
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