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UK-NZ FTA: How businesses can benefit from the UK and New Zealand trade deal

The UK-NZ Trade Agreement cuts duty and simplifies trade. But what has actually been agreed for goods and rules of origin?


The comprehensive trade agreement between the UK and New Zealand aims

  • remove barriers to trade

  • deepen access to our advanced tech and services companies

  • make it easier for smaller businesses to break into the UK or New Zealand market.

Tariff Removal: The Highlights

Removing duties for one particular market is beneficial for exporters over other international businesses acting in that import market that do NOT benefit from the same preferential treatment.


At the same time, allowing more NZ or UK products into a market for reduced duty increased competition with local produce - possibly by lowering prices for consumers overall.


This FTA cuts duty rates in both markets:

  • The main goods imported into the NZ market from the UK include vehicles and parts, machinery, equipment, buses, ships, bulldozers and excavators, clothing and footwear and pharmaceuticals. For these products and others, New Zealand has agreed to remove customs of up to 10%.


  • At the same time, New Zealand’s main goods exports to the UK benefit from lower to no duty. The UK is one of the biggest global importers of food products and benefits from New Zealand’s counter-seasonal production of fresh produce and protein. So the NZ products that most benefit from the deal are meat, wine, fruit, some machinery, eggs, honey and wool to name just a few. As a result, New Zealand products, from NZ Sauvignon Blanc wine to NZ lamb, seafood, Manuka honey and kiwi fruits, could be cheaper to buy in the UK.


More granular details, please....

The UK and New Zealand will remove customs duties on 100% of tariff lines for

originating products, in line with the agreed treatments which will be set out in

respective tariff schedules.


  • The UK will eliminate tariffs on 96.7% of tariff lines on the day the FTA enters into force.

  • New Zealand will eliminate tariffs on 100% of tariff lines on the day the FTA enters into force.

  • New Zealand and the UK will share tariff preference utilisation data.

  • New Zealand and the UK will also agree on commitments in respect of prohibiting export duties, facilitating trade in remanufactured, repaired and altered goods, ensuring transparency of import and export licensing procedures, and upholding WTO rules in respect of import and export restrictions.

For specific products, the following has been agreed:


Beef

The UK will remove duties on beef after 10 years (duty-free from Year 11 onward). During the first 10 years following the entry into force of the Agreement, a duty-free transitional quota will be made available for originating beef imports from

New Zealand.


Sheep meat

The UK will fully liberalise sheep meat after 15 years (duty-free from Year 16 onward).

During this time, a duty-free transitional quota will be made available for originating

imports of sheep meat from New Zealand.


Butter

The UK will fully liberalise butter duties in 6 equal reductions over 5 years.

During this time, a duty-free transitional quota will be made available for originating

butter imports from New Zealand.


Cheese

The UK will fully liberalise cheese duties in 6 equal reductions over 5 years. During this time, a duty-free transitional quota will be made available for originating

cheese imports from New Zealand.


Fresh apples

Duties on fresh apples exported from 1 January to 31 July will be fully liberalised from entry into force. For fresh apples exported from 1 August to 31 December, the UK will fully liberalise duties in equal instalments over 3 years. Fresh apples will be duty-free, quota-free year-round from Year 4 onwards.


 

Examples of Tariff Reductions for New Zealand Exporters


UK-NZ FTA Examples of Tariff Reductions for New Zealand Exporters
.pdf
Download PDF • 480KB

 

Rules of origin

New Zealand and the UK commit to rules of origin:

  • Efficient and low-cost processes to prove the originating status of goods, minimising the amount of paperwork at the border for traders and customs authorities.

  • Producers, exporters and importers will be able to declare the origin and claim tariff preferences on their goods.

  • No requirement for verification visits by the importing country to ascertain if goods being imported into its territory are originating.

  • The UK and New Zealand will explore how the agreement’s cumulation provisions could be extended in the future, including in relation to developing countries and mutual FTA partners.

Tolerance

A tolerance threshold for non-originating materials of 15%, including a weight-based threshold for Harmonised System (HS), chapters 1-24 and 50-63, and by value for all products.


Product Specific Rules

The rules that determine if specific products are eligible to benefit from tariff

preferences under the FTA include:

  • A change-of-tariff-classification (CTC) approach for the majority of products.

  • For almost all industrial products, traders will also have the benefit of choosing to meet origin through an alternate Regional Value Content (RVC) rule. Process rules will apply for specific industrial products.

  • For agricultural goods, the origin will be established through CTC and specific processing rules (for example, grinding or refining).

  • Some product rules will reflect specific industry priorities, such as an RVC of 25% for finished automotive vehicles in HS code 8703.

Customs procedures and trade facilitation

The UK and New Zealand commit to efficient and transparent customs procedures that

will support increased trade under the FTA. Goods will be released from customs

within clear timeframes to provide certainty for traders. Paperwork will be minimised

where possible, with more information available electronically (complementing

paperless trading commitments, which will be set out in the digital chapter). The rules

agreed will reinforce New Zealand and the UK’s ability to maintain effective customs

control.


Commitments in the customs procedures and trade facilitation chapter will include:

  • Goods to be released as soon as possible on or before arrival, but in any case within 48 hours of arrival at customs, provided all requirements have been met.

  • Expedited customs procedures for expedited shipments (for example fast-track parcels), including allowing for single submissions of information and release of expedited shipments within 6 hours if all requirements have been met.

  • Perishable goods are to be released within 6 hours if all requirements have been met.

  • Such products will also be given appropriate priority when scheduling any required examinations.

  • A maximum time period of 90 days for issuing advance rulings on tariff classification and origin to traders.

  • Custom brokers will not be required to be used for import and export procedures.

  • Information regarding customs procedures will be made available online.

  • Review mechanisms will be made available to traders in respect of customs

  • authority decisions.

  • A commitment that the UK and New Zealand will work together on how customs procedures can be further simplified to support trade between the countries.

  • New Zealand and the UK will endeavour to further simplify procedures, including further reducing data requirements, for traders fulfilling certain defined criteria.


Sanitary and phytosanitary measures (SPS)

The UK and New Zealand already benefit from a Sanitary Agreement that recognises the equivalence of sanitary measures maintained by both countries for the protection of public and animal health.


The FTA will build on this and existing WTO obligations by including additional sanitary and phytosanitary provisions that will facilitate trade while ensuring the protection of human and plant life and health.


Imports will still have to meet the same food safety and biosecurity standards in New Zealand and the UK. Both countries recognise the importance of independent SPS regimes. The UK and New Zealand also agree that composite products, as defined by EU

retained law Commission Decision 2007/275/EC of 17 April 2007, will be brought into

the scope of the UK-New Zealand Sanitary Agreement.


Commitments in the SPS chapter will include:

  • Provisions that state that the countries affirm their rights under the WTO SPS agreement, and provisions that set out the relationship between the SPS chapter and the WTO SPS Agreement.

  • Recognition of the principle of equivalence of SPS measures where the exporting country objectively demonstrates that its measures achieve the importing country’s appropriate level of protection.

  • Outlining how phytosanitary regional conditions can be recognised in a way that enables New Zealand and the UK to take into account the pest status of areas from which goods may be sourced while protecting plant life and health.

  • Provisions allowing for New Zealand and the UK to adopt emergency measures to address urgent problems of human or plant health protection.

  • Provisions that will promote transparency and mechanisms to discuss and resolve incidents where New Zealand or the UK considers that a measure or draft measure, or its implementation, is inconsistent with the chapter.

  • Provisions on audit and verification activities will allow both New Zealand and the UK to maintain confidence in each other’s SPS regimes.

  • A commitment to remove approval processes for establishments and facilities

  • within the scope of the chapter, acknowledging the robustness of each other’s SPS regimes.

  • A provision that will set out New Zealand and the UK’s understanding that, other than for phytosanitary purposes, low-risk food within the scope of the chapter will not require health certification under their respective laws and regulations. The two countries have agreed in principle to recognise that a risk assessment would justify the introduction of health certification for a particularly low-risk food.

  • A commitment to enhancing cooperation on antimicrobial resistance both bilaterally and in relevant international fora with a particular focus on addressing the unnecessary use of antibiotic agents in the rearing of animals for food production and protecting the efficacy of critical antibiotic agents.

Small and medium-sized enterprises (SMEs)

New Zealand and the UK commit to publishing information about the FTA which is considered useful for SMEs. The chapter will include provisions that facilitate cooperation between New Zealand and the UK to reduce barriers to SMEs’ access to international markets and global supply chains. This will include exchanging best practices, participating in trade promotion programmes, and working together to identify ways to help SMEs take full advantage of opportunities provided by the FTA.


Next Steps

Following agreement in principle (AIP), several steps need to be completed before the FTA can enter into force. The negotiations to finalise the FTA text will proceed in light of the principles agreed in the AIP document. Once the negotiations are concluded, the FTA will need to be signed by the parties.


Once finalised, countries have to carry out a number of important steps including the publication of an independently scrutinised impact assessment and publication of the FTA text.


The Parliamentary scrutiny process can also begin.


Download


Agreement in Principle (AiP)

New-Zealand-UK-FTA-Agreement-in-Principle
.pdf
Download PDF • 545KB

Agreement in Principle Explainer

UK-New Zealand FTA_ agreement in principle explainer - GOV.UK
.pdf
Download PDF • 222KB

UK-NZ FTA timeline

UK-NZ-FTA-Timeline
.pdf
Download PDF • 458KB

Key Outcome Paper

NZ-UK-Key-Outcome Paper
.pdf
Download PDF • 553KB

10 Key Benefits of the UK-NZ FTA for the UK

ten-key-benefits-of-the-uk-new-zealand-free-trade-agreement
.pdf
Download PDF • 195KB

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