UK-New Zealand Free Trading Agreement

Published 1st Mar 2022 by MY Export Hub

UK-New Zealand Free Trade Agreement is completed. Business guidance, explainers and other documents to help you understand the Free Trade Agreement (FTA) between the UK and New Zealand.

The UK has finalised a free trade deal on goods and services with New Zealand after reaching agreement in principle last October.

The UK government sees the deal as a fillip to UK small businesses, services exports and another step towards the UK’s much-desired accession to the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) trade bloc.

International trade secretary Anne-Marie Trevelyan described the deal as “a vital part of our plan to build new trade routes for services, which the UK excels at, and to refocus Britain on the faster-growing parts of the world in the Asia-Pacific region, including accession to CPTPP, a vast free trade area … with a joint GDP of £8.4 trillion in 2020”.

The UK-NZ trade relationship was worth £2.3 billion in 2020, with the UK government estimating this will now “increase by almost 60%, boosting our economy by £800 million and increasing wages across the UK”.

Tariff ‘elimination’

Under the new deal, tariffs will be eliminated on all UK exports to New Zealand, including current tariffs of up to 10% on clothing and footwear, 5% on buses and up to 5% on ships, bulldozers and excavators.

The government said that smaller businesses – it estimates 5,900 UK SMEs already export goods to New Zealand – would find the NZ market “easier” to break into because of “modernised customs procedures, such as digital documents and customs clearance as quick as six hours”.

‘Flexible rules of origin’

The deal’s “flexible rules of origin…will give British exporters an advantage over international rivals” in the NZ market, whose imports are “expected to grow by 30% by 2030”.

Institute of Export & International Trade director general Marco Forgione congratulated the UK government on “achieving this deal so quickly – it is excellent news for traders”.

Further details

He added that traders would be keen to see further details, including about “flexible” rules of origin.

“The need to demonstrate compliance with rules of origin is a big reason why SMEs often do not access the tariff benefits of trade deals,” Forgione said. “If this deal can streamline that process, then it will be especially welcome.”

The government said other benefits would include UK professionals, such as lawyers and auditors, being able to work in New Zealand more easily, and bring their families with them

The deal has been signed by Trevelyan and NZ minister for trade and export growth Damien O’Connor.

Business guidance


Summary document outlining 10 benefits for the UK from the UK-New Zealand Free Trade Agreement (FTA).
1. Levelling up the UK

This deal will deliver benefits to people, businesses and communities throughout the country – supporting the levelling up agenda. It is expected to increase trade with New Zealand by almost 60%, boost the economy by £800 million and add £200 million to household wages in the long-run.

2. Red tape cut for small businesses

Red tape will be slashed for the 5,900 UK small and medium-sized enterprises (SMEs) that export goods to New Zealand. These businesses employed 233,000 people in 2020.

Simple and modern customs procedures, including a commitment to release goods within 48 hours of arrival if requirements have been met, will save time and money for businesses. A dedicated chapter in the agreement will provide SMEs with practical advice and support to find opportunities and links to commercial partners in New Zealand.

3. Tariff-free access for British goods

At entry into force, businesses will benefit from the immediate removal of tariffs on 100% of UK goods exports, worth £17 million annually. These tariff reductions include clothing (up to 10%), footwear (up to 10%), buses (5%), ships (up to 5%) and bulldozers and excavators (up to 5%). Flexible rules of origin will also give UK firms an advantage over international rivals in the New Zealand import market, a market which is expected to grow by around 30% by 2030.

4. Better investment opportunities

This agreement will protect investors and increase opportunities in both countries, making it easier for UK businesses to expand their footprint and become more profitable in New Zealand. Higher screening thresholds mean that fewer UK investments will be subject to review under New Zealand’s overseas investment regime. This will limit barriers and lead to savings for UK businesses, who owned £900 million worth of foreign direct investment in New Zealand in 2020.

5. Global leadership on climate and environment

This deal includes a ground-breaking environment chapter that reinforces our commitments to the Paris Agreement and our efforts to meet net zero. It will also encourage trade and investment in low carbon goods, services and technology, with the most comprehensive list of environmental goods with liberalised tariffs in a trade deal to date.

6. Opening new digital markets

The deal will cut red tape for our advanced tech and services companies, making it easier to break into the New Zealand market. Customs duties on electronic transmissions, such as software, will be prohibited. Easier e-commerce and the free flow of trusted data, essential for modern businesses, will be guaranteed between the UK and New Zealand. In 2019, 40% of the UK’s £651 million of services exports to New Zealand were delivered digitally.

7. Boosting the UK’s world-leading services sector

The deal guarantees that British service suppliers – from accountancy and legal services to financial services and engineering – can compete in New Zealand on an equal footing. It will keep licensing and authorisation procedures transparent and straightforward, help facilitate the recognition of UK qualifications in New Zealand, support innovation in financial services, and promote the UK’s leadership in fintech. The deal could increase the gross value added of the financial and professional business services sectors by around £105 million (compared to 2019 levels).

8. More opportunities to work in and travel to New Zealand for business

Brits will be able to work more freely in New Zealand thanks to unprecedented new commitments that allow UK service suppliers, including lawyers and auditors, to deliver contracts. It will be easier for senior managers, executives and specialists to move on intra-company transfers. They will be eligible for visas to work for a period of 3 years and family members will also be able to join.

9. Kiwi quality at lower prices

Consumers will benefit directly from increased choice, better product quality and lower prices for imported goods. Removing tariffs could make high-quality products that British consumers love more affordable, including Marlborough Sauvignon Blanc, Manuka Honey and kiwi fruit.

10. Paves the way to CPTPP

This deal is another step towards our accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a major trans-pacific trading bloc. Joining CPTPP would hitch the UK to some of the world’s biggest current and future economies, populated by half a billion people and with a joint gross domestic product (GDP) of £8.4 trillion in 2020.

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