The UK’s news on agreed terms for the future free-trade agreement with New Zealand marks the second success by the Government in negotiating bespoke Free Trade Agreements since the UK’s withdrawal from the EU.
The agreement in principle with New Zealand was struck on Wednesday 20 October after 16 months of negotiations. It runs ahead of the EU's competing negotiations. The main business elements of that agreement include the removal of tariffs on 97.6% of tariff lines, better access to service and digital markets, the creation of investment opportunities, as well as the protection of high farming, sourcing and environmental standards.
This agreement in principle mirrors the UK’s milestone reached in the negotiations with Australia in June 2021, and takes the UK another step closer to joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trading bloc of 11 nations and a GDP of £8.4 trillion.
Recognising the importance of the advanced technology market, the agreement in principle marks deeper cooperation on digital trade and looks to stimulate collaboration in an effort to foster new innovations. DWF leads in this sector through our Mindcrest division and welcomes the focus on innovation and digital trade.
The hot issues for business will include immediate removal of all tariffs on a range of New Zealand's export products such as apples, wine, and honey, as well as UK export products such as drinks, apparel, footwear, automobiles, ships and machinery. In contrast, tariffs on sensitive agricultural products such as lamb, beef and dairy will be phased-out gradually and subjected to tariff quotas.
The agreed rules provide also for fair trade remedies and a safety valve – a temporary safeguard mechanism. The temporary safeguard is a means to react to surges in imports of particular goods in order to shield the home industry producing competing goods. This provision addresses reported concerns by sensitive sectors such as beef, lamb and dairy.
Foreign investors will benefit from raising domestic security screening thresholds. The future agreement will lead to opening up of professional service markets, including financial and legal services and a commitment to meeting 'net zero' and implementing the Paris Agreement. The agreement will promote trade in environmental goods, services and investment, and much more.
As a legal business with a presence in the Indo-Pacific markets, DWF welcomes this news, which will lead to further strengthening our ties with the region.
We will avail ourselves of the opportunities presented by the legal services provision to remove the barriers on UK, Australian and New Zealand lawyers providing legal advisory services in their respective jurisdictions and to increase collaboration between the relevant authorities.
With a presence across the UK as well as in Brisbane, Sydney, Gold Coast, Melbourne and Singapore, DWF is uniquely placed to assist local and international clients navigate the rules and ramifications of the UK's trade agreements and to enable them to take advantage of the opportunities they present.
We welcome the priority which the Government has placed on accession to the CPTPP which we consider to be a key milestone in delivering a boost for UK and Commonwealth companies through the vision of a Global Britain.
Nestled between the Global Investment Summit and COP26, this agreement in principle heralds the developments afoot in the international fora as countries continue to recover from the pandemic. The members of the International Trade team at DWF have more than 30 years of combined trade policy, free trade deals and trade remedies experience. The DWF team would be delighted to advise and assist any stakeholder with respect to market access strategies, trade remedies and direct steps with the competent authorities. We would be delighted to provide any further insight or clarification on the Agreement in Principle, available at UK-New Zealand FTA negotiations: agreement in principle - GOV.UK (www.gov.uk).