On 28 February 2022, two months after signing the UK-Australia free trade agreement, the UK signed a free trade agreement with New Zealand, aiming to reduce barriers to trade between the two countries. In this article we have outlined the key elements of the agreement and what exporters, importers and businesses need to know.
Under the agreement, the UK and New Zealand have agreed to remove all tariffs on originating goods of the other, cutting red tape to boost bilateral trade. New Zealand will remove tariffs on all UK goods immediately, but the UK will in certain cases stage the removal of tariffs over a 15 year period.
Certain tariff quotas will be in place for goods belonging to sensitive UK industries, including beef, sheep meat, butter, and cheese.
In order for the reduced tariff to apply, the goods must genuinely originate from the relevant country. The rules of origin state that the product must either be wholly obtained, or substantially transformed through processing, either in the UK or New Zealand.
The agreement guarantees that British service suppliers can complete in New Zealand. It will keep licencing and authorisation procedures transparent and straightforward, whilst facilitating the recognition of UK qualifications in New Zealand. This section of the agreement aims to enable freer movement of professional workers between the two countries.
In addition, there are commitments regarding entry and temporary stay of businesspersons travelling between the two countries. The deal includes non-discrimination rules that aim to ensure both UK and New Zealand firms are treated fairly when providing services in each other’s markets.
The agreement commits to facilitating cross-border financial services, ensuring free flow of financial data across borders, and provisions to promote innovation in financial services.
The UK and New Zealand have agreed to work closely on a range of animal welfare matters. Provisions include a commitment to increased bilateral cooperation and aim to enhance animal welfare standards in both countries. It also contains a clause to the effect that neither country can lower their animal welfare standards or make exceptions for producers in a manner which materially affects trade.
In summary, the UK-New Zealand Free Trade Agreement is part of the UK’s push to build a network of trade alliances in a post-Brexit reality. The Government has stated that the deal will boost bilateral trade by 60% and open up opportunities for professional services, luxury British goods, and the movement of British professionals and their families between the UK and New Zealand. The agreement is not yet in force and as such the reality of the benefits to both countries remains to be seen.
If you would like to discuss your specific circumstances or to understand more about how the agreement impacts you, please do get in touch.