17 Jun 2020

NZ begins free trade talks for 'comprehensive' deal with UK

5:06 pm on 17 June 2020

New Zealand and Britain have formally launched free trade negotiations today, the Trade Minister has announced.

New Zealand is among the first countries to negotiate a trade agreement with the UK post-Brexit.

Trade Minister David Parker said the UK is one of New Zealand's oldest friends.

"New Zealand and the United Kingdom have a close relationship, including strong trade and economic ties, common values and traditions and a shared history. A free trade agreement will be an important new milestone in that relationship.

"In the post-Brexit environment, it makes more sense than ever for us to be working together to grow this partnership for the future," he said.

waving colorful flag of great britain and national flag of new zealand. macro

The UK is New Zealand's sixth largest trading partner, with two-way trade totalling almost $6 billion last year. Photo: 123rf.com

The UK is New Zealand's sixth largest trading partner, with two-way trade totalling almost $6 billion last year.

Parker said both sides underscored their commitment to achieving an early conclusion to a high quality, comprehensive and inclusive trade agreement.

"We look forward to an FTA that opens up more opportunities for small and medium sized businesses, Māori exporters, and our regional communities, consistent with our Trade for All objectives.

Environment Minister David Parker at a press conference announcing the Government's reforms to clean up our 
waterways, Beehive Theatrette, Wellington.

David Parker Photo: Pool / Stuff / Kevin Stent

"As the global economy continues to be severely impacted by the effects of Covid-19, we are more committed than ever to concluding a bilateral FTA capable of delivering significant benefits to the people of both New Zealand and the UK," he said.

Parker said New Zealand officials will be working hard to secure the removal of tariffs, the development of new approaches to address non-tariff barriers, and the facilitation of trade through streamlined customs procedures and good regulatory practice and cooperation.

Work would also be done on developing new ways of thinking to foster digital trade, and to support sustainable development, including climate change.

Prime Minister Jacinda Ardern said the launch of negotiations was an "important milestone" for the two nations.

"A future free trade agreement will be a significant step in our relationship and unlock the potential for closer trade ties.

"Together we believe we can create a world leading agreement that will open doors for our businesses to trade, invest, and innovate more, and to work more closely than ever to seize opportunities in the global economy", she said.

Watch the full media conference with PM Jacinda Ardern, Trade Minister David Parker and British High Commissioner Laura Clarke here:

British High Commissioner Laura Clarke said New Zealand and the UK share the same values on tackling inequality and climate change, and a future agreement would build on that.

"We share a commitment to a high ambition, high quality, future proofed free trade agreement, that will bring benefits to citizens of both our countries and support us in the recovery from Covid-19.

"As two countries deeply committed to tackling climate change... we will work to ensure the free trade agreement has strong environmental and sustainability provisions", she said.

The launch follows a disappointing first offer from the European Union on a free trade agreement last week, which saw Parker accuse the bloc of agricultural protectionsim.

Parker said he expected the same problems to come up in negotiations with the UK, but he was more optimistic.

"We always run into issues on agricultural access, having said that I think the United Kingdom is expressing the view that they've wanted to be more open with the rest of the world after Brexit than before, so we're hopeful in respect of those negotiations.

"It's also, though, somewhat complicated by the fact that the UK-EU Brexit negotiations are not yet complete and on some areas of the negotiation I think finalisation will be contingent on those outcomes", Parker said.

In response to questions about the likelihood of returning to a pre-1972 arrangement, where New Zealand had unlimited access to the UK market, Clarke said the UK "shared an ambition to liberalise tariffs as much as possible", and said it would be a "whole piece negotiation".

Parker would not give a time frame on how long negotiations would take.

He said he believed that the non-controversial elements of the negotiations could be dealt with "pretty swiftly", but more contentious issues would be dependent on the UK-EU negotiations.

National's Trade spokesperson Todd McClay said the government must secure a comprehensive agreement without any trade restrictions.

"Crucially, for a deal to be judged a success, it must be equal to our Closer Economic Relations (CER) Trade Agreement with Australia, and include unrestricted trade in agriculture products especially unencumbered access from New Zealand lamb and butter to the UK market.

"The Government should model the NZ UK FTA on the CER agreement with Australia, our most comprehensive agreement to date, and it should include free movement of people", he said.

McClay said this was especially important, given the stalled negotiations between New Zealand and the EU.

UK High Commissioner in New Zealand Laura Clarke.

Laura Clarke Photo: Supplied

Australia keen for trade deal with UK

Free trade talks with the UK will officially begin later this month, as Australia desperately seeks closer relationships with nations beyond China.

Australian politician Simon John Birmingham speaks during a promotional event organised by ‘Tourism Australia’ on February 26, 2020 in Mumbai, India.

Simon Birmingham Photo: AFP

Trade Minister Simon Birmingham announced the official start of the talks, which come after years of preliminary manoeuvring between the countries.​

Birmingham has long hoped Australia would be among the first countries to secure a trade deal with the UK, but had to wait for Brexit before official negotiations could begin.

The government hopes it can finalise a deal within the year, which would be much faster than the years typically taken to reach an agreement.​

"Australia will be looking to secure better market access for goods exports, especially in agriculture, and high standard rules for digital trade and investment to expand our already deep economic relationship," Birmingham told the National Press Club.

Even if Australia secures a deal with the UK, its value will pale in comparison to Australia's exports to China, which were worth almost $A150 billion ($NZ159.8b) last year.​

In recent weeks, China has imposed crippling tariffs on Australian barley, banned some beef exporters and urged its students against studying in Australia.

Australian exports to the UK were worth more than $A15 billion last year, up $10 billion on the previous year, thanks almost entirely to record UK spending on Australian gold, amid Brexit and fears over geopolitical tensions.​

The UK was Australia's second-largest trading partner almost five decades ago. It's now Australia's 12th-largest trading partner.

"UK consumers turned away from Australian produce when high tariffs and low quotas were imposed as a result of their membership of the EU," Birmingham said.

"Brexit now presents new opportunities for our two nations."


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