UK-New Zealand Free Trade Agreement

Paul Richardson ,
1 Mar 2022

In his latest blog, our Policy Adviser (Agriculture & Climate Change) Paul Richardson summarises the impacts on agriculture from the UK-New Zealand Free Trade Agreement announced on 28 February.

On the 28th of February 2022 the Department of International Trade (DIT) confirmed that the UK and New Zealand have finalised a Free Trade Agreement. The agreement will not come into force until approved by both parliaments, likely around mid-2023. In the UK this process includes three-months of scrutiny by the Trade and Agriculture Commission, and government prior to ratification.

On “sensitive agricultural products”, the UK will remove tariffs on imports from New Zealand over a period of time using Tariff Rate Quotas (TRQs). There will be transition periods for butter and cheese of 5 years, for beef 10 years, and sheep meat 15 years.

The specific detail on agricultural products is as follows:

Beef

  • New Zealand will have a duty-free quota for the first 10 years of the agreement, increasing in equal instalments each year from 12,000 tonnes in year 1 to 38,820 tonnes in year 10;
  • any imports above the quota will pay the standard Most-Favoured-Nation (MFN) tariff;
  • a product-specific safeguard will apply in years 11-15;
  • any imports above a “trigger volume” will pay a 20% tariff;
  • the trigger volume will rise from 43,056 tonnes in year 11 to 60,000 tonnes in year 15 in equal instalments;
  • the product-specific safeguard will no longer apply from the end of year 15.

Sheepmeat

  • there will be an annual duty-free quota of 35,000 tonnes in years 1-4 of the agreement, rising to 50,000 tonnes in years 5-15;
  • imports above these thresholds will be subject to the MFN tariff;
  • in any given year, trade can only take place under the FTA quota once the utilisation rate of the WTO quota has reached 90%.

Butter

  • UK imports of butter from New Zealand will be fully liberalised over 5 years with six equal reductions in duties;
  • duty-free quota starting at 7,000 tonnes when the agreement enters into force rising in equal instalments to 15,000 tonnes in year 5;
  • Full liberalisation from year 6 onwards.

Cheese

  • UK imports of cheese from New Zealand will be fully liberalised over 5 years with six equal reductions in duties;
  • duty-free quota starting at 24,000 tonnes when the agreement enters into force rising in equal instalments to 48,000 tonnes in year 5;
  • full liberalisation from year 6 onwards.

According to AHDB, New Zealand currently has access to the UK via a TRQ for 454 tonnes of beef at a zero-tariff rate, with the majority of exports going to the US and China. For sheepmeat, New Zealand has access to the UK with 114,000 tonnes of tariff free TRQs, and has not fulfilled this in recent years, having reduced production and increased exports to China.

The FTA is being billed as a pre-requisite to joining the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). New Zealand will eliminate all tariffs on imports from the UK as soon as the agreement is ratified.

Find out more about the UK-New Zealand Free Trade Agreement on the UK Government website.

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