Free trade agreement between UK and New Zealand confirmed

The much anticipated free trade deal between New Zealand and the UK will come into force at the end of this month, eliminating tariffs on 97% of exports.

New Zealand’s Free Trade Agreement with the UK, which will eventually eliminate tariffs on all exports, will come into force at the end of May, marking an important milestone for the relationship between the two countries.

From 31 May, tariffs on more than 97% of exports from both countries, including wine, honey and onions, will be eradicated.

New Zealand Prime Minister Chris Hipkins called the deal “an amazing opportunity” and revealed it would save New Zealand exporters in the realm of NZ$37 million per year.

“New Zealand exporters have an amazing opportunity to really take it to the world and I am confident that they’re up for it,” he said in a statement yesterday.

Wine trade body New Zealand Winegrowers welcomed the news after a circuitous journey to get the deal across the line, stymied by multiple changes to the UK government, as well as former NZ Prime Minister Jacinda Adern stepping down in February of this year.

“The UK Free Trade agreement is very positive for the New Zealand wine industry. It will more closely align the winemaking standards across the two countries, and help reduce technical barriers to trade, by minimising burdens from certification and labelling requirements on New Zealand wine exports,” said Sarah Wilson, general manager of advocacy and general counsel at New Zealand Winegrowers.

“It will also support future growth in the market, and encourage exporters to focus on the UK, which is New Zealand’s second largest export market for wine.”

“This agreement is especially significant at a time when we are facing increasing costs across the industry, and it will make a big difference for those who export to the UK market. We thank Ministers and officials for their support and conduct of ongoing negotiations over the past few years, during what have been challenging and uncertain times.”

In an exclusive interview with the drinks business in February, Philip Gregan, CEO, New Zealand Winegrowers, predicted that the deal’s completion was just around the corner.

“There’s nothing that will prevent the deal from coming into force, it’s just a question of getting it through the regulatory framework,” he said at the time.

Gregan stressed that not only would a deal make it easier for NZ producers to export to the UK, it would allow for “more modern and flexible winemaking”.

“Rather than being subject to strict EU rules, the free-trade deal means our winemakers will have access to a more ‘normal’ range of winemaking techniques,” he told db.

“When we make wine to sell to the US, for example, we make it in exactly the same way as we would to sell to our domestic market. But until now that has not been the case for the UK. The free trade deal means that producers will be able to make wine in a way that suits them and which corresponds to the seasons rather than having to follow a restrictive protocol with regards to things like acidification and de-acidification.”