Tēnā koutou katoa. Ngā mihi nui ki a koutou katoa.
I am delighted to announce today that following a conversation with Prime Minister Johnson last night, New Zealand and the United Kingdom have Agreed in Principle a historic high-quality, comprehensive and inclusive free trade agreement.
I’m joined today by the Minister for Trade and Export Growth, Hon Damien O’Connor, who is currently isolating after having just returned from Europe. His tireless work with his UK counterparts has been key in securing this agreement.
It was only a bit over a year ago when we launched these free trade negotiations with the United Kingdom in June 2020, during the worsening COVID-19 pandemic, but we were determined to secure an agreement that reflected our two countries’ strong and unique relationship as soon as possible.
At that time we were already seeing the first signs of the severe impact that COVID-19 was having on the global economy, and we were more committed than ever to concluding a bilateral FTA capable of delivering significant benefits to the people of both New Zealand and the UK as our economies recover from the impact of the virus.
We sought an agreement that could drive significant growth in our already substantial economic and trade relationship. Knowing even then the importance this agreement would have in assisting with the recovery which lay ahead of us all.
But it also needed to stand on its own merits.
Our agreement needed to provide comprehensive – and commercially meaningful – access for New Zealand exporters and businesses, by removing tariffs and other barriers that have limited the growth of our goods and services trade and our investment connections.
We also wanted to reflect our shared commitment to demonstrating leadership on the global trade agenda and to sustainable development, including as we work on our trade recovery and diversification.
Crucially too, we sought outcomes that reflected New Zealand’s ambitious Trade for All agenda on sustainable development and inclusive trade.
Advancing and protecting Māori interests in this FTA has been a particular priority for New Zealand throughout.
I’m proud to say that this agreement delivers on all of these objectives.
The market access outcomes are among the very best New Zealand has secured in any trade deal. All tariffs on all products will be eliminated between both countries – and the vast majority of these, 97 percent, will be removed the day the FTA comes into force.
The elimination of these tariffs alone are expected to save New Zealand exporters and businesses around $37.8 million per year based on current export volumes.
Wine is our largest export to the UK – we send around $463 million of high quality New Zealand wine to the UK each year. This agreement overnight will remove $14.1 million of tariffs annually.
For the dairy industry, they will now have commercially meaningful access for products such as butter and cheese – opening an important market that we have effectively been locked out of for a long time. Many other dairy products will also become tariff free.
Beef volumes will increase from 12,000 tonnes to 60,000 tonnes, and for sheep meat they will rise from 149,205 tonnes to over 164,000 tonnes. With free market access after 15 years.
Putting more money back into the pockets of our farmers while presenting them the opportunity for further growth.
It’s an agreement which breaks new ground on indigenous cooperation, trade and gender equality, and consumer protection.
With a focus on issues of particular importance to Māori and to promoting the interests of small and medium sized enterprises runs throughout this agreement.
We have also reached agreement on ambitious outcomes in the environment and labour areas.
And keeping aligned with our Government’s climate change priorities this is our first bilateral trade agreement to include specific commitments on climate change – with provisions towards eliminating environmentally harmful subsidies, including commitments to eliminate harmful fossil fuel subsidies, and prohibit fisheries subsidies which lead to overfishing.
Progressing this FTA will also give a significant boost to the UK’s efforts to expand its engagement in the wider Indo-Pacific region, which New Zealand warmly welcomes, and as it pursues accession to the region’s premier trade agreement, the CPTPP.
The NZ-UK ‘Agreement in Principle’ has been concluded in double-quick time, with negotiations launched barely a year ago.
The next step will be finalising the FTA text to give effect to the outcomes now agreed.
Our teams will be working at pace to complete this task in the coming period, so the Agreement can be signed quickly and then brought into effect.
There’s something else alongside this agreement that we have settled between us in parallel.
Both countries have agreed to start work to extend and improve the current Working Holiday arrangements. This will be part of a ‘Mobility Dialogue, separate to the trade deal.
This will build on the tradition of overseas experiences, which we have long shared.
I was a benefactor of that very scheme, travelling to the UK in 2006 to work for the civil service.
These changes will improve the access that young New Zealanders will have in the years to come to live and work in the UK – a key priority identified in public consultations about an FTA with the UK.
The exact details are subject to some final discussions, but are expected to be similar to those recently announced between the UK and Australia.
The United Kingdom and New Zealand are great friends, close partners, and fierce sporting rivals of course.
The historical connections that bind us run deep.
This world-leading free trade agreement we are now on the verge of concluding will lay the foundations for even stronger connections in the future.
This serves New Zealand well as we reconnect, rebuild and recover from COVID-19, and look forward into the future.