Last October, the UK and New Zealand governments reached an agreement-in-principle on a free trade agreement (FTA) that will boost access to goods and services markets for businesses in each country.
Significantly, the two sides have agreed to remove all trade tariffs (taxes on imports). New Zealand will eliminate 100 percent of tariffs on imports from the UK upon the agreement’s entry into force. At the same time, the UK will remove 96.7 percent of tariffs on imports from New Zealand, with the remainder, which concern mainly tariffs on agricultural produce such as beef, lamb, and cheese, to be phased out over 5 to 15 years.
The agreement also tackles non-tariff barriers such as customs procedures and other forms of trade hindering red tape.
Goods will be released from customs within clear timeframes to provide certainty for traders and reduce costs. There will also be a fixed 90-day period for issuing advance rulings on tariff classification and origin.
The agreement aims to minimize paperwork needed to release goods and there will be no requirement to use a customs broker when importing or exporting goods.
Information about customs procedures in each country will be put online, making it more accessible to traders. Additionally, review mechanisms will be made available to traders in respect of customs authority decisions.
Rules Of Origin
The agreement’s rules of origin provisions, which determine which goods qualify as originating in New Zealand and the UK to receive preferential tariff treatment, aim to streamline procedures so that traders and customs authorities can more easily prove the originating status of goods.
Trade In Services
Further commitments aim to liberalise services markets to make it easier for services companies to operate in each other’s economies, including professional, financial, maritime and delivery services firms. Notably, the agreement includes “ambitious” cross-border market access commitments for financial services.
Both countries have also committed to facilitate the entry and temporary stay of business persons travelling between the UK and New Zealand. This will make it easier for UK professionals such as lawyers and architects to work in New Zealand and vice versa.
This chapter also includes new commitments to allow service suppliers to deliver contracts more easily in each country, benefiting the professional and business services sector in particular.
Both parties have committed to rules that ensure fair and open competition and address barriers to investment in each country. These commitments will cover all investment, portfolio and foreign direct investment. Investors will also receive fair treatment and protection from expropriation of assets.
On IP, the FTA will include provisions on copyright, design rights, patents, trademarks, trade secrets, enforcement, and test data. It will also include a commitment from New Zealand to extend the term of copyright protection by 20 years for authors, performers, and producers of phonograms over a 15-year period, bringing its protection in line with the UK's terms for published work.
Other notable areas covered by the FTA include: sanitary and phytosanitary (SPS) measures, which seek to ensure food safety; telecommunications; digital trade; government procurement; competition; consumer protection; labour; and the environment.
The Agreement In Numbers
The New Zealand Government said the FTA will boost its economy by NZD1bn, with exporters expected to save NZD38m annually due to tariff cuts.
The UK has highlighted the benefits for its SMEs in particular, with the 6,200 SMEs exporting goods to New Zealand to see administrative costs reduced.