New Zealand trade deal: PM hails ‘big’ new deal – but NFU warns offering ‘next to nothing’ for UK farmers

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New Zealand trade deal: PM hails ‘big’ new deal – but NFU warns offering ‘next to nothing’ for UK farmers


British sheep farmers could face increased competition from New Zealand lamb imports following a free trade deal that was struck and hailed as “excellent” by Prime Minister Boris Johnson.

The deal, reached in principle by Mr Johnson and his counterpart Jacinda Ardern during a video call on Wednesday, will reduce tariffs on UK exports, including cars and clothing, and popular New Zealand imports, especially wine and honey as well as lamb.

The National Farmers’ Union (NFU) has expressed concern about the implications of a deal which it says “offers nothing in return” to UK farmers.

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The NFU said there was a big downside for sectors such as red meat, dairy and horticulture

UK-New Zealand trade was £ 2.3 billion last year, or 0.5% of UK trade with the EU, but the government has expects volumes to increase as a result of the deal.

This is the second free trade agreement (FTA) to be concluded from scratch since Brexit after the one with Australia, although London and Canberra have yet to sign an agreement first. announced with fanfare in June.

Ministers hope this will further the UK’s goal of joining the Pacific trading bloc which includes Australia, New Zealand, Canada and Japan.

The principles of the New Zealand FTA are similar to those of the Australia deal, with the most controversial tariffs on agricultural products phased out over a 15-year period in an attempt to allay the concerns of UK farmers.

Under the deal, New Zealand exporters will be able to send 35,000 tonnes of lamb to the UK duty-free for the first four years, rising to 50,000 tonnes for 10 years before quotas are completely removed.

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Boris Johnson made the deal in a video call with New Zealander Jacinda Ardern Pic: Tim Hammond / 10 Downing St

Last year it exported 39,000 tonnes of lamb to the UK worth £ 212.5million, and New Zealand exports to the UK have fallen in recent years.

A similar timetable for the phasing out of tariffs will apply to dairy products.

The government said the deal would create new opportunities for technology and service companies to access the New Zealand market and welcomed the removal of tariffs of 20% on imported wine and 16% on wine. honey.

British cars, buses and construction vehicles, Britain’s most valuable export to New Zealand, will benefit from the 10% tariff removal, as will clothing, while gin, chocolate, cheese and crisps will no longer be subject to 5% import tax.

Mr Johnson said: “This is an excellent trade deal for the UK, cementing our long friendship with New Zealand and strengthening our ties with the Indo-Pacific.

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Earlier this year Mr Johnson struck a trade deal with Australian Prime Minister Scott Morrison

“This will benefit businesses and consumers across the country, lowering costs for exporters and opening up access for our workers. “

The NFU, however, warned that British agricultural interests had been sacrificed in order to strike deals with Australia and now New Zealand.

“We will be opening our doors to significant additional volumes of imported food – whether or not produced to our own high standards – while guaranteeing next to nothing in return for UK farmers,” said its chairman, Minette Batters.

“We should all be concerned that there is a huge downside to these deals, especially for sectors such as dairy, red meat and horticulture.

Sheep stand in a pyre in Portobello near Dunedin on September 19, 2011
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Under the deal, New Zealand will be able to sell 35,000 tonnes of lamb to the UK duty free for the first four years

“The government is now calling on UK farmers to take on some of the most export-oriented farmers in the world, without the serious, long-term and properly funded investment in UK agriculture that can allow us to do so.

“That’s why it’s very, very difficult for the NFU to show any support for these agreements.

“They imply significant benefits for farmers on the other side of the world who can now access our extremely valuable market, but have few noticeable benefits for UK producers, either at home or abroad. “

Labor said, according to the government’s own analysis, the deal would cost jobs in agriculture and bring no additional growth.

Bottles of wine during a visit by the Prince of Wales and Duchess of Cornwall to the Hunting Lodge Winery in Auckland on the second day of the Royal Visit to New Zealand.  Photo by the AP.  Picture date: Monday November 18, 2019. See PA story ROYAL Tour.  Photo credit should read: Chris Jackson / PA Wire
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Tariffs on imported wine will be abolished

“This is a deal where the only big winners are the mega-companies that run New Zealand’s meat and milk farms, all at the expense of UK farmers who are already struggling to compete,” the secretary said. at the Emily Thornberry Ghost Trade.

“But for UK jobs, growth and exports, this deal is another massive failure. “

She cited figures from a 2020 government analysis that suggested a deal would add between -0.1% and 0% to GDP over 15 years, compared with 0.35% to New Zealand’s, and would add £ 112 million to UK exports.

Analysis by Paul Kelso, business correspondent

The importance of a trade deal with New Zealand is not in the size of the deal, but in its symbolism for post-Brexit Britain.

The deal will certainly not have a transformational impact on the economies of the two countries. According to the government’s analysis cited by Labor, a deal with Wellington will add precisely zero to Britain’s GDP, if not less, and could push New Zealand to 51st place on its list of its most valuable trading partners.

Far more important to the government is the fact that, four months after reaching a similar deal with Australia, British negotiators secured another free trade deal on terms built from scratch, rather than rolled over from scratch. existing EU agreements.

Equally as important as the signal sent by the renewal of vows with former Commonwealth partners is that New Zealand and Australia are both members of the trade bloc that the UK wishes to join, having left it to its own. door.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) may be a mouthful, but it brings together big economies like Japan, Canada and Singapore.

While the strategy is clear, many trade observers argue that these deals were made at too low a price. The deal with Australia was widely seen as a huge win for Canberra with little to no tangible benefit for the UK.

As the most politically sensitive sector for any nation in a trade deal, agriculture is a decent indicator, and while farmers across the antipodes are thrilled with duty-free access to UK markets, only the Hills of Sheep and British cattle pastures worry.

There is another caveat in the Australian agreement. Four months after Boris Johnson and Scott Morrison posed among the roses on Downing Street, the deal is still not done after Australia’s chief negotiator returned from the UK last week without a signature.

Ms Ardern said: “This landmark free trade agreement lays the foundation for even stronger ties as the two countries embark on a new phase in our relationship. It’s good for our economies, our businesses and our citizens. “

Mike Cherry, National President of the Federation of Small Businesses UK, said: “New Zealand has long been a priority market for small UK exporters – over a quarter of which already sell there – and we welcome them. efforts to strengthen existing trade ties that stretch back decades. ”

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