Ardern: Zero tariffs in UK a ‘huge deal for NZ’

A major free trade deal between New Zealand and the United Kingdom has been struck, promising zero tariffs for all New Zealand exports and a $970 million economic boost.

The sweeping ‘‘in-principle’’ deal will entirely remove tariffs on most goods produced in New Zealand, making 63 per cent of current exports tariff free once a final agreement is settled.

Beef and sheepmeat exports – one of the most contentious aspects of the negotiations – will be tariff free in 15 years.

The agreement will also significantly open New Zealand up to British contractors and business professionals, raise the threshold for scrutinising UK investments in New Zealand to $200 million, and, notably, the UK has committed to help New Zealand protect the world-famous Ka

Mate haka.

‘‘We have achieved really ambitious tariff elimination ... Cheese, butter, milk powder, areas that matter an enormous amount to New Zealand, benefit from this trade agreement . . . This is a huge deal for New Zealand,’’ Prime Minister Jacinda Ardern said, when announcing the details of the deal yesterday.

The UK is New Zealand’s seventh-largest trading partner, with two-way trade worth $6 billion in the year ended in March last year. Once the deal is signed, it is expected to boost exports by 40 per cent and New Zealand’s gross domestic product by $970m.

Though some fine print has yet to be hashed out, Ardern was confident the substantive aspects had been settled. ‘‘We’ve got an agreement in principle here; the deal is done, and so now it’s on to concluding the finer parts ... and seeing it come into force next year.’’

Among the immediate winners will be wine and honey

exporters, who face tariffs of $50 per 100 litres of wine and 16 per cent on honey.

Wine has been New Zealand’s largest export to the UK, worth $463.1m a year, and Ardern said the deal would remove ‘‘overnight’’ $14.1m in tariffs a year.

Tariffs will also be removed on wine, honey, onions and hoki for the day the deal is signed. Tariffs on apples and mussels will be removed in three years.

Butter and cheese exports will become tariff free after five years.

After it is signed, the deal will immediately remove tariffs on 97 per cent of New Zealand product lines, and all tariffs on British goods entering New Zealand.

There will also be an easing of visa requirements between the countries for business contractors, professionals and visitors.

On the climate policy front, both countries have committed to removing fuel subsidies and moving away from fossil fuel use, and, importantly, the deal doesn’t preclude a country from regulating industry to meet its climate goals.

New Zealand has also agreed to bolster its copyright laws. Performer and artist rights will be expanded, and a further 20 years will be added to copyright terms.

‘‘We have achieved really ambitious tariff elimination.’’ Prime Minister Jacinda Ardern

There has also been broad agreements on participation of Ma¯ ori in trade between the countries, and ‘‘a commitment by the UK to co-operate with New Zealand to identify appropriate ways to advance recognition and protection of the haka Ka Mate’’.

Ardern spoke with UK Prime Minister Boris Johnson on Wednesday evening to finalise the in-principle agreement.