British shoppers and exporters can expect a boost from the UK’s much-anticipated trade deal with New Zealand as negotiators continue to work “round the clock” to conclude the talks in the coming weeks.
A sixth round of negotiations in July were described as having made “good progress” by international trade secretary Liz Truss. It is predicted that a deal will be finalised by the end of the month.
According to a government announcement, high quality New Zealand products such as wine, food and drink could be tariff-free in UK shops. Wine could be 20p a bottle cheaper.
Buy British
New Zealanders could be encouraged to buy British by the removal of tariffs of up to 10% on goods such as chocolate, gin, buses and clothes.
British brands that could benefit include Beefeater gin and Belvoir soft drinks, which currently face 5% tariffs, as well as Tee Time Clothing.
Apparel has a 10% tariff going into New Zealand, which is a £30m market for British fashion.
Exporters of motor vehicles and caravans also face a 10% tariff and could be big beneficiaries of a deal. The sector exported £133m worth of goods to New Zealand last year.
Mutual fans
Truss said the deal would be mutually beneficial for both countries.
“We are working round the clock to get this deal done in the coming weeks. We are both big fans of each other’s high-quality products, so this could be a huge boost that allows British shoppers to enjoy lower prices and British exports to be even more competitive,” she said.
According to the Evening Standard, the DIT said fresh trading terms could help British exporters “gain an advantage over international rivals in the New Zealand import market”, which is expected to grow by 30% by 2030.
Apples and honey
The price of New Zealand apples and Manuka honey could also be slashed for British shoppers, with more than £42m of the fruit imported in 2020 and more than £32m of honey. They currently face tariffs of 8% and 16% respectively.
Trade between the UK and New Zealand was worth £2.3bn last year and would be expected to increase with a deal.
Top exports and imports
According to the ONS, the top 5 goods exported from the UK to New Zealand in the four quarters to the end of Q1 2021 were:
- Cars (£155.3 million or 20.7% of all UK goods exported to New Zealand)
- Specialised machinery (capital) (£48.6 million or 6.5%)
- Medicinal & pharmaceutical products (£32.2 million or 4.3%)
- Road vehicles other than cars (consumer) (£31.2 million or 4.2%)
- Other manufactures (consumer) (£30.2 million or 4.0%)
The top 5 goods imported to the UK from New Zealand in the four quarters to the end of Q1 2021 were:
- Beverages (£254.4 million or 30.3% of all UK goods imported from New Zealand)
- Meat & meat preparations (£226.5 million or 27.0%)
- Vegetables & fruit (£52.5 million or 6.3%)
- Scientific instruments (capital) (£39.8 million or 4.7%)
- Sugar (£39.2 million or 4.7%)
CPTPP
New Zealand is also a member of the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) trade bloc, which the UK hopes to join.
A trade deal with New Zealand would aid the UK’s case, the government feels.
The founding members are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
