UK exports to New Zealand will have tariffs slashed as the two countries signed a new trade agreement, but with a farming union warning it will do little for farmers.
International Trade Secretary Anne-Marie Trevelyan and New Zealand minister for trade and export growth Damien O’Connor have signed the deal, after an agreement in principle was reached last October.
The UK-New Zealand trade relationship was worth £2.3bn in 2020 and is now expected to increase by almost 60% and eliminating tariffs on 100% of UK exports.
Under the new deal, tariffs will be scrapped on all UK exports to New Zealand, including current tariffs of up to 10% on clothing and footwear, 5% on buses and up to 5% on ships, bulldozers and excavators.
Smaller businesses will also find it easier to break into the New Zealand market as a result of modern custom procedures, such as digital documents and customs clearance as quick as six hours.
It will see red tape being slashed for the 5,900 UK SMEs who export goods to New Zealand and employ 233,000 people.
However, the farming sector has raised concerns over the impact of cheaper exports from New Zealand, including lamb.
Under the deal, New Zealand will be granted more access to the UK market for lamb exports.
The deal will see all quotas on lamb lifted after 15 years, but before that there will be a quota of 35,000 tonnes for the first four years, then 50,000 additional tonnes thereafter.
However, the quota will only be accessible once the existing quota that the country has through the World Trade Organisation (WTO) of 114,000 tonnes is filled to 90%.
Officials have said Wellington currently uses only half of its WTO quota at present.
NFU Cymru president, Aled Jones said: “Last autumn we raised serious concerns about the future trade deal with New Zealand, when the agreement in principle was published. There is nothing contained in today’s announcement to allay my concerns. I see very little in this deal to benefit Welsh farmers and there are significant downside risks for the red meat and dairy sectors, both of which characterise traditional Welsh family farming.
“This latest deal with New Zealand closely mirrors the UK/Australia deal, confirming the precedent which we feared had been set, leading to full tariff liberalisation across a range of sectors over the next few years. This means that we will shortly be opening our doors to potentially significant extra volumes of imported food, whether or not produced to our own high standards, while securing very little in return for our producers. The potential negative cumulative impact of this cannot be overstated.
“These deals offer significant upsides for farmers on the other side of the world, who will in due course have full access to our hugely valuable market.
"The UK Government is asking us to go toe-to-toe with some of the most export-orientated farmers in the world, without the serious or long-term investment that is necessary to enable us to grow our exports. We call on the UK Government to convene the recently announced Food and Drink Export Council and to ensure the agri-food attachés which were promised to us last year are in post as a matter of urgency.”
The UK Government said the deal means that professionals such as lawyers and auditors being able to work in New Zealand more easily, while products such as Marlborough sauvignon blanc, manuka honey and kiwi fruit could become cheaper.
The UK Government said the deal was “the most advanced agreement New Zealand have signed with any nation bar Australia” and heralded it as “one of our greenest deals ever”.
International Trade Secretary Anne-Marie Trevelyan said: “This deal will slash red tape, remove all tariffs and make it easier for our services companies to set up and prosper in New Zealand.
“Our trade with New Zealand will soar, benefiting businesses and consumers throughout the UK and helping level up the whole country.
“Like all our new trade deals, it is part of a plan to build a network of trade alliances with the most dynamic parts of the world economy, so we set the UK on a path to future prosperity.”
Last month, Ms Trevelyan said there “isn’t a downside” to the UK-New Zealand trade deal after she was challenged by MPs about the impact the agreement will have on British farmers.
Bridgend-based manufacturer of patented concrete formwork systems firm K-Form, welcomed the new trade deal.
Its managing director Amanda Amoui said: We believe this agreement will help facilitate trade between two countries that share deep ties of history, culture and values.
“International growth has always been a strategic priority for K-Form. Last year, we saw increasing demand for our patented concrete formwork system in New Zealand. With this trade deal removing up to 5% tariffs on exports, it will enable us to continue our positive momentum and together with our distribution partner in the region, 4S Limited, increase our share of the New Zealand market.”
Minister for Exports Mike Freer said, “Thousands of big and small businesses across the UK like K-Form will benefit from what New Zealand has to offer. Free trade agreements like the New Zealand deal help to cut red tape, remove punitive tariffs and are a crucial shot in the arm for our own national exporting ambitions. In Wales alone, this deal could boost the economy by around £15m
“In 2020, hundreds of Welsh businesses exported around £23 million of goods to New Zealand, so I’m looking forward to seeing this deal generate more exporting success stories, as we help to level up the country and foster a dynamic new trading relationship.”
