Britain and New Zealand have signed a free trade agreement which the UK government says will boost two-way trade by 60% by eliminating tariffs, cutting red tape and allowing freer movement professional workers.
Most business leaders welcomed the deal, which was agreed in principle in October and follows a similar deal with Australia, but the National Farmers Union (NFU) said it would lead to unfair competition in their sector.
Trade Minister Anne-Marie Trevelyan predicted the deal would add £800m to the UK economy over the next decade.
“Our trade with New Zealand will soar, which will benefit businesses and consumers across the UK and help improve the whole country,” she said.
Tariffs of up to 10% on clothes and shoes, 5% on buses and up to 5% on ships, bulldozers and excavators will be eliminated, she said.
William Bain, head of trade policy at the UK Chambers of Commerce, joined Federation of Small Business chief Mike Cherry and Mayor of London Vincent Keaveny in describing the deal as an opportunity for businesses British to provide services. on an equal footing with companies based in New Zealand.
“The agreement will also boost trade in environmental goods and services – essential for the transition to net zero,” Bain added.
However, NFU President Minette Batters said eliminating agricultural tariffs would expose “sensitive sectors like beef and lamb, dairy and horticulture” to unfair competition. .
“Once again, there appears to be extremely little in this New Zealand trade deal that benefits UK farmers. UK agricultural businesses face significantly higher production costs than New Zealand farmers, and margins are expected to tighten further in the face of rising input costs, higher energy bills and labor shortages,” she said.
“The Government is now asking UK farmers to compete with some of the most export-oriented farmers in the world, without the serious, long-term and well-funded investment in UK agriculture that can enable us to do so; the kind of strategic investment in agriculture and exports that the New Zealand government has made over the past few decades.
Critics of the government’s decision to leave the EU’s single market and customs union say Trevelyan was embroiled in a damage limitation exercise that would fail to overcome the loss of duty-free access to the largest free trade area in the world.
David Henig, trade expert and director of the European Center for International Political Economy, said the New Zealand deal came with “exaggerated economic predictions” of benefits for both countries and was “in fact likely to be economically marginal”.
Trade between the two countries was worth £2.3billion in 2020. When the tentative deal was announced last year, New Zealand said it would bring a raise of almost £500million sterling to its GDP.
The deal is the latest step in Britain’s post-Brexit pivot away from Europe and into countries in the Indo-Pacific region, where it sees export opportunities for British professional services and products from luxury.
Trevelyan said the deal would eliminate all tariffs on UK exports to New Zealand and make work easier for UK professionals and their families.
Hot on the heels of a deal with Australia, Britain said it was a further step towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – an 11-nation trade pact at the heart of British ambitions in the region.
“Like all our new trade deals, this is part of a plan to build a web of trade alliances with the most dynamic parts of the global economy, so we are setting the UK on the path to future prosperity. “, said Trevelyan.