UK/NZ FTA: What has been agreed for beef and sheepmeat?

The UK and New Zealand have agreed a FTA (Free Trade Agreement) in principle.

Negotiations launched on June 17^th, 2020 and came to a close on October 20^th, 2021.

According to the UK government, the trade agreement’s “main” elements have been agreed upon.

As a result, it is now taking “necessary steps” to prepare the agreement for signing.

The UK said the “ground-breaking” historic trade deal will:

• Cut red tape for businesses;
• End tariffs on UK exports;
• Create new opportunities for tech and services companies;
• Make it easier for UK professionals to live and work in New Zealand.

UK-New Zealand trade was worth £2.3 billion last year and is set to grow under the deal.

Tariffs as high as 10% will be removed on a huge range of UK goods, from clothing and footwear to buses, ships, bulldozers and excavators.

This will give British exporters an advantage over international rivals in the New Zealand import market, which is expected to grow by approximately 30% by 2030.

UK and New Zealand trade agreement 

We have listed some of the particulars the document contains.

• New Zealand and the UK commit to removing all customs duties on bilateral trade, with most tariff lines.
• Other mechanisms will facilitate trade and address non-tariff barriers between our two countries;
• In turn, the UK will eliminate tariffs on 96.7% of tariff lines on the day the FTA enters into force;
• NZ will eliminate tariffs on 100% of tariff lines on the day the FTA enters into force;
• The UK and NZ will share tariff preference utilisation data;
• Both countries will also agree to commitments in respect of prohibiting export duties, facilitating trade in remanufactured, repaired and altered goods, ensuring transparency of import and export licensing procedures, and upholding WTO rules in respect of import and export restrictions.

For specific products, both counties have agreed on the following:

Beef

• The UK will remove duties on beef after 10 years (duty-free from Year 11 onward).
• During the first 10 years, following entry-into-force of the agreement, a duty-free transitional quota will be made available for originating beef imports from New Zealand.
• This quota volume will increase in equal annual instalments, in line with the below in the following years:
  • 1: 12,000MT
  • 10: 38,820MT
• If this quota is filled in a given year, any further originating imports of beef from New Zealand will be subject to MFN base rates;
• During years 11-15, following entry-into-force, a product-specific safeguard will be applied to beef. Trigger volumes will increase in equal annual instalments, in line with the below years:
  • 11: 43,056MT
  • 15: 60,000MT
• If the trigger volume is met in a given year, the UK will apply a duty of 20% to any further originating imports of beef from New Zealand for the remainder of the year.
• The product-specific safeguard will be removed at the end of Year 15, and beef trade will be fully liberalised.

Sheep meat

• The UK will fully liberalise sheep meat after 15 years (duty-free from Year 16 onward);
• During this period, a duty-free transitional quota will be made available for originating imports of sheep meat from NZ. This quota volume will be set as below:
  • Years 1-4: 35,000MT per year
  • Years 5-15: 50,000MT per year
• If this quota is filled in a given year, any further originating sheep meat imports from New Zealand will be subject to MFN base rates.
• In a given year, trade can only occur under the FTA quota once the utilisation of New Zealand’s WTO country-specific sheepmeat quota into the UK has reached 90%.

Cheese

• The UK will fully liberalise cheese duties in 6 equal reductions over five years;
• A duty-free transitional quota will be made available for originating cheese imports from New Zealand during this time. This quota will open at 24,000MT from entry into force and will build in equal annual instalments to 48,000MT at Year 5;
• Also, cheese will be duty-free, quota-free from Year 6 onwards.

Butter

• The UK will “fully liberalise” butter duties in 6 equal reductions over five years.
• During this time, a duty-free transitional quota will be made available for originating butter imports from New Zealand. This quota will open at 7,000MT from entry into force and will “build-in” equal annual instalments to 15,000MT at Year 5.
• Lastly, butter will be duty-free, quota-free from Year 6 onwards.