OPINION: Here’s why you should care about the Free Trade Deal with the UK, which has been agreed in principle today.
It’s only the second deal the UK has done since Brexit, and essentially since 1973 when it joined the EU and shut New Zealand goods out of its markets.
Free Trade Deals allow us to sell our goods in other countries without that country applying a tax or levy or tariff on it. In turn, that country can sell goods to us without is putting a tax or levy or tariff on it.
At the moment, there are quite high tariffs the UK have applied on our goods that we export there.
For example, our seafood products have a 20% tariff applied to them, meaning they’re more expensive, so fewer people buy them. Our honey has a 16% tariff. Our onions, kiwifruit, and apples have an 8% tariff. For every 100 litres of our wine, the tariff is as high as $90.
And the most punitive is the restrictions on beef and lamb, which not only have high tariffs, but limits on how much in total we can export over there. All of these measures mean New Zealand goods are more expensive, and hence more unaffordable.
So this trade deal with the UK will mean those tariffs will either be scrapped straight away, or slowly removed over a number of years. I am concerned though at the length of time it will take for tariffs on some products to be removed.
Lamb won’t be tariff-free until 2036. Beef won’t be tariff-free until 2031. Butter and Cheese won’t be tariff-free until 2026.
The reason? British farmers are worried our meat will be better than theirs, and also cheaper than theirs.
I understand why the UK is worried - we are the ones who mainly benefit from this deal. Our exports to the UK will increase by 40%.
Whereas the UK’s exports to us will only increase by 7.3%. So while it’s not a perfect deal, it’s still a good one. It’s bloody great news for our exporters, and our economy.
And boy don’t we need all the help we can get at the moment.
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