UK-NZ Free Trade Agreement to Boost Economic Relations and Export Opportunities

New Zealand's announcement of a Free Trade Agreement (FTA) with the United Kingdom has been met with enthusiasm and anticipation from various sectors of the economy. Set to take effect on May 31, the agreement is expected to deepen economic ties and open new avenues for trade between the two nations.

Export New Zealand, an organization representing exporters, has hailed the NZ-UK FTA as comprehensive and modern, expressing confidence in the strengthened economic relationship it will foster. Josh Tan, Senior Policy Advisor at ExportNZ, highlighted the exceptional market access package achieved through the negotiations.

"With this agreement, we'll see 99.5 percent of current exports entering the UK tariff-free, and a clear path to 100 percent tariff elimination for NZ exporters," Tan noted. This development is seen as a boon for British consumers who enjoy New Zealand products like sauvignon blanc and spring lamb, while simultaneously benefitting Kiwi exporters.

BusinessNZ Chief Executive Kirk Hope emphasized the positive impact the FTA will have on bilateral trade. Prior to the COVID-19 pandemic, the two-way trade between New Zealand and the UK amounted to around six billion dollars annually, a figure expected to rise with the implementation of the FTA.

Hope highlighted that the agreement sends a strong signal to British investors, affirming New Zealand's attractiveness as an investment destination due to its stability and transparency.

Canterbury Employers' Chamber of Commerce has also lauded the agreement, stating that it will provide better access for Canterbury exporters to the UK market. Leeann Watson, CEO of the Chamber, emphasized the benefits for primary sector and manufacturing businesses in the Canterbury region.

The FTA is expected to reduce export costs and level the playing field, enhancing the competitiveness of New Zealand products in the UK market. Watson also commended the dedicated chapter in the agreement that focuses on maximizing opportunities for small and medium-sized businesses, which are regarded as engines of growth in the local economy.

The horticulture industry, which has faced numerous challenges during the COVID-19 pandemic, welcomed the early implementation of the FTA with the UK. Nadine Tunley, Chief Executive of Horticulture New Zealand, expressed gratitude to government officials for expediting the agreement, citing its potential to provide hope for the future and support industry growth.

The FTA aligns with the Aotearoa Horticulture Action Plan, which aims to increase the industry's value to $12 billion by 2035. The plan includes the elimination of tariffs and non-tariff barriers, making the FTA's early adoption a significant step toward achieving these goals.

The Dairy Companies Association of New Zealand (DCANZ) celebrated the FTA, emphasizing the positive impact it will have on the dairy sector. Kimberly Crewther, Executive Director of DCANZ, highlighted that the agreement will lead to complete duty-free entry into the UK market by 2028, enabling New Zealand exporters to compete on an equal footing with their European counterparts.

The UK, as the world's second-largest dairy import market, holds substantial potential for New Zealand dairy products. The elimination of tariffs on various dairy products, including liquid milk, yogurt, and infant formula, will create opportunities for increased trade and market share.

While the FTA's entry into force marks a significant milestone for New Zealand's trade with the UK, the actual level of trade will ultimately depend on market dynamics and commercial demand. Nonetheless, the agreement provides a valuable platform for building stronger relationships with UK dairy customers and expanding export options for New Zealand's dairy industry.

As New Zealand and the United Kingdom embark on this new chapter of free trade cooperation, both countries anticipate the mutual benefits and strengthened economic ties that lie ahead.