NZ and UK free trade deal signed - 'worth up to $1 billion'

New Zealand and the UK have signed off on the free trade agreement (FTA), that will see almost all tariffs removed on most exports.

The Government expects it to boost New Zealand's GDP between $700 million to $1 billion.

Trade Minister Damien O'Connor said both New Zealand and the UK were aiming for the deal to come into force by the end of this year, after the agreement is ratified through both parliaments.

Prime Minister Jacinda Ardern said that "virtually all our current trade will be duty free from entry into force, including duty-free quotas for key products like meat, butter and cheese, helping to accelerate our economic recovery".

Trade Minister Damien O'Connor said both countries are aiming for the deal to come into force by the end of this year.

"This is our first bilateral trade agreement to include a specific article on climate change and includes provisions towards eliminating environmentally harmful subsidies, such as harmful fossil fuel subsidies, and prohibiting fisheries subsidies which lead to overfishing," she said.

“It also includes a ground-breaking Māori Trade and Economic Cooperation chapter that will create a platform for cooperation on issues important to Māori.

The FTA was signed off overnight by Damien O'Connor and UK Secretary of State for International Trade Anne-Marie Trevelyan.

O'Connor said $14 million worth of wine export tariffs would be removed, with honey exporters also seeing their $16/$100 worth of honey duty cost removed.

Trade Minister Damien O'Connor says New Zealand should be "very proud" of the agreement.

Duty-free quota on beef, sheep meat, butter and cheese will be introduced progressively, with all tariffs removed for products after 5-15 years.

“Our dairy and red meat sectors will, for the first time since the 1970s, have tariff-free access that will grow through significant quotas until being fully liberalised,” O’Connor said.

Speaking on Breakfast after the signing, O'Connor said the agreement was "really extraordinary".

He said the team had worked hard over the last two years, largely virtually, on the agreement.

“We’re very proud of them and I think the country should be very proud of it," he reflected.

“Overall, [it's] an incredible opportunity for exporters. It’s up to them whether they take up those opportunities.”

O'Connor said the agreement was the "first stepping stone" for the UK into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and said New Zealand was "enthusiastic" about its presence in this part of the world.

“This trade agreement builds back a strong relationship and formalises it into a very valuable market.”

New Zealand and the UK announced they had agreed on a FTA in principle in October, 2021.

New Zealand would be able to send over its wine, honey, onions and hoki without being hit with tariffs imposed by the UK, while the UK could export its gin, chocolate, motorhomes and caravans and some jewellery without being hit by ours.

Tariffs or quota restrictions would remain on some products over a period between three to 15 years, including on beef, sheep, butter, cheese, apples and mussels, but there have been large increases in the volumes New Zealand can export before tariffs apply.

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