Primary industry groups have welcomed the news of a free trade agreement between New Zealand and the United Kingdom.
Officials believe the agreement will be worth $1 billion to New Zealand’s GDP, with tariffs removed from wine, honey, onions and hoki on day one of it coming into force.
Mussels will have tariffs removed in four instalments over four years, while dairy tariffs will be slowly reduced over five years on butter and cheese.
Tariffs on sheepmeat and beef will be liberalised slowly over 15 years. During this period, a transitional tariff-free quota will increase until after 15 years, when all tariffs are eliminated.
Trade Minister Damien O’Connor said he thought the deal was worth “a whole lot more” than $1 billion.
“What it does is provide us an opportunity to compete on a level playing field,” he told The Country’s Jamie Mackay.
“This is a good deal, the UK has accommodated many of our requests, we were always more ambitious – but it’s a good deal for both of us.”
As the UK looked to extend its trade to the rest of the world through the CPTPP, it realised there had to be “give and take” in negotiations, O’Connor said.
“We meet the standards that they will require in trade agreements and so it was easier for us to negotiate than perhaps some of the other trade parties that they might be dealing with.”
Federated Farmers said today’s announcement was great news for consumers and farmers in both countries.
“We congratulate the New Zealand team of negotiators, officials and politicians who have tenaciously pursued this deal. The result is impressive. It’s a job well done,” Federated Farmers national president Andrew Hoggard said.
There had been a worrying trend of growing protectionism for agricultural products since the outbreak of Covid-19, Hoggard said.
“This FTA shows trade liberalisation remains the way forward globally.”
Apiculture New Zealand was also pleased with the announcement, with chief executive Karin Kos saying it was “a great outcome” for the industry.
The UK consistently ranked as one of the top three export markets for New Zealand honey and was worth $70 million annually, Kos said.
“We have strong ties with UK customers, with a long history of exporting high-quality honey products there.
The current in-quota tariff rate of 16 per cent had been “a significant barrier to trade,” Kos said.
“Apiculture New Zealand has been seeking the removal of these tariffs for some time and we extend our thanks to the government for persevering and progressing this on our industry’s behalf.”
Meanwhile, Onions New Zealand said it applauded the FTA’s decision to eliminate tariffs.
The agreement would benefit onion growers and regional communities, from Pukekohe to Canterbury, Onions NZ chief executive, James Kuperus said.
“Without clear trading arrangements, improved market access and reduced tariffs, it is extremely difficult to export from the bottom of the world to larger economies like the United Kingdom.”
New Zealand currently exports $11 million worth of onions to the UK annually, and in 2019, the industry was worth $200 million back to the grower – 85 per cent of which came from exports, Kuperus said.
The deal will involve transition periods for many key agricultural goods, some key details are:
• Cheese to be fully liberalised after 5 years, with a duty-free transitional quota of 24,000 tonnes increasing to 48,000 tonnes.
• Butter to be fully liberalised after 5 years, with a duty-free transitional quota of 7,000 tonnes increasing to 15,000 tonnes.
• Beef to be fully liberalised after 15 years, with a duty-free transitional volume of 12,000 tonnes increasing to 60,000 tonnes.
• Sheep meat to be fully liberalised after 15 years, with a duty-free transitional quota of 35,000 tonnes increasing to 50,000 tonnes.
• Apples will be fully liberalised after 3 years, with a seasonal transitional quota of 20,000 tonnes.
• Vegetable seeds for sowing will be fully liberalised after entry into force
• Onions will be fully liberalised after entry into force.
• Wine will be fully liberalised after entry into force.