A new discussion paper has been released by the New Zealand International Business Forum (NZIBF) delving into the potential in a future free trade agreement with the United Kingdom – NZ-UK FTA – as the UK prepares to leave the European Union.
NZIBF chair Malcolm Bailey says the UK is one of New Zealand’s most steadfast and like-minded trade friends.
“We have deep shared history, culture and people-to-people links. Despite the huge shift in our trade to the Asia-Pacific, the UK remains our fifth-largest trading partner, fourth-biggest agri-food export destination and fifth-biggest source of investment,” he added.
The NZIBF report was prepared by associate director Stephanie Honey on the basis of interviews with a wide range of business and other contacts over the last three months.
Bailey noted the UK was a key market for many NZIBF members, especially for sheepmeat, wine, apples and honey, and with huge potential on dairy and beef.
“The British are world leaders in services trade, in the tech sector and in the creative economy, and there are some exciting potential synergies there. The UK also offers a high-value market for sophisticated niche manufactured products such as agri-tech and medical devices.
“There are still some barriers between us, especially in the agri-food area and in some aspects of services trade. I would expect to see dynamic gains in both economies if we can free those barriers up and use the agreement to build new global value chains serving markets in Asia and North America,” Bailey adds.
The UK and New Zealand have both signalled an interest in an FTA. New Zealand was one of only four new potential partners identified by the UK earlier this year. The New Zealand Government has launched a consultation process for stakeholders.
Highlights from the report were presented today by NZIBF executive director Stephen Jacobi to a business audience brought together by NZIBF member Russell McVeagh and the British NZ Business Association.
“A future NZ-UK FTA has a strategic dimension, potentially serving as a building block towards eventual UK membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP,” comments Jacobi. “Perhaps one day it might even form part of a Commonwealth-wide trade arrangement. That’s why we need this deal to be as ambitious as possible”.
“Despite uncertainties about the Brexit process, we look forward to engaging with New Zealand and UK business colleagues and officials as this process moves forward,” concluded Jacobi.
The report reminds readers that the UK is still significant. It is a sophisticated market of over 66 million people, with the fifth largest economy in the world and is the second-largest in the EU worth US$2.94 trillion, plus it is a member of both G7 and G20. New Zealand, despite its small size, is a strong economic performer offering useful niche opportunities.
New Zealand is a counter seasonal producer in both the livestock and horticulture sectors, it highlights.
“There is potential for British and New Zealand producers to work together to offer year-round shelf supply in a range of markets, grow brands and consumption and to develop innovative and complementary approaches that draw on the best expertise, ideas, resources and areas of comparative advantage in each economy. This partnering could supply not just each other’s markets but also third countries, especially in the Asia-Pacific.”
A NZ-UK FTA could also lead to the design of non-tariff measures enabling trade through the use of World Trade Organisation (WTO)-plus approaches to sanitary and phytosanitary (SPS) measures, standards and labelling, the report suggests. In addition, New Zealand’s recognition as an international leader in areas such as food safety and animal welfare is well understood by the UK and others in the EU, as evidenced by the now 20-year-old EU-New Zealand Veterinary Agreement.
“The New Zealand business community would want to see such a framework continue post-Brexit in respect of the UK, as well as an acknowledgement of equivalence on animal welfare and outcomes-focused regulatory approaches.”
The preparation of the NZIBF report was supported by BusinessNZ, Beet + Lamb NZ, Dairy Companies’ Association (DCANZ), Meat Industry Association, NZ Winegrowers and NZ Apples and Pears.