New Zealand and the UK have agreed in principle on a "historic" free trade agreement (FTA) that will reduce tariffs on a range of products.
In a joint statement, Prime Minister Jacinda Ardern and Minister for Trade and Export Growth Damien O’Connor said the deal will give a boost of almost $1 billion to New Zealand GDP.
It said the UK will eliminate all tariffs on New Zealand exports, including honey, wine, kiwifruit, onions, a variety of dairy and meat products, and most industrial products.
According to the readout, New Zealand exporters will save approximately $37.8 million per year on tariff elimination alone.
- Prime Minister Boris Johnson and I spoke yesterday evening to mark this historic moment and its importance in forging a stronger and more dynamic future relationship between two close friends and partners - Ardern said.
- This deal serves New Zealand’s economy and exporters well as we reconnect, rebuild and recover from COVID-19, and look forward into the future.-
She said, “it’s one of our best deals ever and secured at a crucial time in our COVID recovery."
UK Prime Minister Boris Johnson described the deal as "the cherry on the top of a long and lasting partnership between the United Kingdom and New Zealand."
- It is good for both our economies, boosting jobs and growth as we build back better from the pandemic. We already share deep ties of history, culture and values, and I look forward to the next chapter in our friendship - he said.
New Zealand Trade Minister O’Connor said by removing tariffs and other barriers "our exporters and businesses can now enter a new era of market access they have never before had available."
The draft deal is the latest to be brokered by the UK after its departure from the EU, as Australia and the UK announced a free trade agreement in June.
According to a UK government statement, the trade deal “helps pave the way for the UK to join Trans-Pacific Partnership, a free trade area of 11 Pacific nations with a GDP of £8.4 trillion in 2020.”
Trade between the UK and New Zealand was worth £2.3 billion ($3.2 billion) in 2020.