Policy managers blog by James McCluggage.
Along with the Australian deal, the New Zealand (NZ) trade deal represents a significant liberalisation of the UK marketplace. UK farmers are being asked to go “toe to toe” with some of the most competitive and export orientated producers in the world. We’ve seen next to nothing from government about how it will work with farming to achieve the gains necessary to survive this new trading environment – promoting exports, driving efficiency and increasing productivity – which makes it hard for the Ulster Farmers’ Union (UFU) to show any support for these deals. They involve significant upsides for farmers on the other side of the world who can now access our hugely valuable market but contain little discernible benefit for United Kingdom (UK) producers. The government should set out as a matter of urgency how this deal will tangibly benefit UK agriculture.
The UFU will be pulling together a detailed overview of the UK-NZ Agreement in principle, but in summary:
- NZ has agreed to liberalise (eliminate) 100 percent of tariffs from entry into force. It’s worth noting that NZ is one of the most liberal countries in the world and the majority of its tariffs are already set at or very close to zero.
- NZ exports to UK – tariffs on NZ imports into the UK are eliminated at entry into force of the agreement bar the exceptions as set out below:
Beef
The same as the Australian deal, the tariffs on beef will be eliminated over a period of 15 years.
- Years one to 10: A duty-free transitional quota will be in place for NZ beef, outside of the quota the tariffs remain at current MFN levels. The quota volume will increase in equal annual instalments:
– Year one = 12,000 tonnes à Year 10 = 38,820tonnes
- Years 11 – 15: A product specific safeguard will be applied to beef. The volumes represent trigger volumes and if imports from NZ go over this point a duty of 20 percent will be applied for the remainder of the year. Trigger volumes will increase in equal annual instalments:
– Year 11 = 43,056 tonnes à Year 15 = 60,000 tonnes
- Year 16+: Beef trade is fully liberalised, no restriction on quantity and completely duty free with no product specific safeguard.
Lamb
The same as the Australian deal, the tariffs on lamb will be eliminated over a period of 15 years.
- A duty-free transitional quota will be made available for originating imports of sheep meat from New Zealand. Outside of this quota the current MFN tariff for sheep meat applies. This quota volume will be set as below:
– Years one to four: 35,000 tonnes per year
– Years five to 15: 50,000 tonnes per year
– Years 16+: sheep meat will be duty free and quota free
- In a given year, trade can only occur under the FTA quota once the utilisation of New Zealand’s WTO country-specific sheep meat quota (114,138 tonnes) into the UK has reached 90 percent.
Butter
The same as the Australian deal, the tariffs on dairy products will be eliminated over a period of five years:
- A duty-free quota will be made available for originating butter imports from New Zealand:
- Year one = 7,000 tonnes à year 5 = 15,000tonnes.
- Year six plus: Butter will be duty free, quota free.
Cheese
The same as the Australian deal, the tariffs on dairy products will be eliminated over a period of five years:
- A duty-free quota will be made available for originating cheese imports from New Zealand.
- Year one = 24,000 tonnes à year five = 48,000 tonnes.
- Years six plus: Cheese will be duty free and quota free.
Apples
The tariffs on fresh apples (a major NZ export interest) will be eliminated over three years. The phase out will respect the seasonality of UK apples.
Years one to three:
- 1 January to 31 July – tariffs will be eliminated at entry into force.
- 1 August to 31 December – the UK will fully liberalise duties in equal instalments over three years.
– A seasonal, duty-free transitional quota of 20,000 tonnes per year will be available for fresh apple from New Zealand.
- Year four plus: Fresh apples will be duty free and quota free year-round.
Safeguards
The agreement in principle (AIP) confirms that there will be a bilateral safeguard which the government can use to protect domestic producers against a surge of imports (effectively it allows for tariffs to be re-imposed). However, at this stage there is no detail as to how it will work or if it will be time limited or will apply for the entire duration of the agreement.
SPS (Sanitary and phytosanitary measures)
The Veterinary Agreement which already exists between the UK and NZ covers trade in products of animal origin. As a result, the SPS agreement in the AIP is focused mostly on trade in plants/plant products. It confirms the rights of both the UK andNZ to regulate on SPS matters and establishes that in the future, the two Parties may deem each other’s regulatory systems as being “equivalent”. The ban on hormones in beef production (which are used in NZ) remains in place.
Antimicrobial resistance
The parties commit to enhancing cooperation on antimicrobial resistance both bilaterally and in relevant international fora with 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.
Animal welfare
There will be a chapter in the agreement on animal welfare. The UK and NZ agree to non-regression (i.e., standards will not go backwards) and non-derogation (i.e., standards will be applied properly) and both parties will work together on the international stage.
Environment
Both parties reaffirm their commitments to protecting and enhancing the environment, including combatting climate change. The agreement affirms each parties commitments under the Paris agreement and Montreal Protocol. There will be commitments on tackling environmentally harmful subsidies, promoting clean energy and sustainable agriculture.
