New Zealand has inked a major free trade deal with the United Kingdom that promises to remove tariffs on all exports within 15 years. The free trade agreement, signed in London overnight Tuesday by Trade Minister Damien O’Connor, has been touted as offering an up to $1billion GDP boost for New Zealand by cutting tariffs, raising quotas, and liberalising rules in a trading relationship that was worth $6b in the year to March 2020. “This is a gold-standard free trade agreement. Virtually all our current trade will be duty free from entry into force, including duty-free quotas for key products like meat, butter and cheese, helping to accelerate our economic recovery,” Prime Minister Jacinda Ardern said, in a statement announcing the signing. The final agreement, which mostly resembled the “in-principle” deal announced with fanfare by the Government in October 2021, would mean 69 per cent of current exports tariff-free once a final agreement is settled. The remaining exports, which include fresh apple, butter and cheese, and beef and sheep meat, will progressively become tariff-free over 15 years. For the United Kingdom (UK), all exports to New Zealand will be tariff-free as soon as the deal comes into force, with likely products to benefit including British gin, chocolate, motorhomes and campervans. The agreement will also open New Zealand up to British contractors and business professionals, and raise the threshold for scrutinising UK investments in New Zealand to $200 million.
The UK government will also celebrate the deal as a major win for its post-Brexit strategy, as it aims to prove itself as a leading member of the international community after leaving the European Union in 2020. Included in the agreement were new provisions for climate change, environment, and equity in economic advancement. “This is our first bilateral trade agreement to include a specific article on climate change and includes provisions towards eliminating environmentally harmful subsidies, such as harmful fossil fuel subsidies, and prohibiting fisheries subsidies which lead to overfishing,” Ardern said. Ardern said the deal was also “ground-breaking” for its inclusion of a Māori trade chapter. Within the agreement was both a Treaty of Waitangi exception clause, a feature of all trade deals in the past two decades, and also an acknowledgement of the “unique relationship” between Māori and the UK, which colonised New Zealand in the 19th Century. The agreement included a commitment from the UK to co-operate with the protection the world-famous Ka Mate haka, performed by the All Blacks, was now omitted from the deal. A “side letter” attached to the deal acknowledged that Ngāti Toa Rangatira was the guardian of this haka. O’Connor, who signed the agreement with UK Trade Secretary Anne-Marie Trevelyan, said in a statement it was estimated New Zealand exports to the UK would increase by more than 50 per cent due to the agreement. “Our largest export to the UK is wine – approximately $500 million. Overnight $14 million of wine tariffs will evaporate. New Zealand’s honey exporters will no longer face a $16 duty for every $100 worth of honey they send to the UK,” he said. “This is a commercially meaningful and excellent deal.” Federated Farmers national president Andrew Hoggard said it was reassured to have the deal “signed and sealed” "The United Kingdom is walking the talk when it comes to promising a truly global Britain,” he said, in a statement. "With the way the world is, it seems to us that strengthening rules-based trade between free democratic countries is more important than ever.”