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Alliance after Brexit: Great Britain and New Zealand announce free trade agreements

2021-10-21T07:30:10.440Z

The negotiations were delayed and the economic effect is considered to be manageable. But a free trade agreement now signed with New Zealand could bring Britain closer to a bigger goal.



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Prime Minister Ardern and her Trade Minister Damien O'Connor announce the deal

Photo: Nick Perry / AP

After 16 months of negotiations, Great Britain and New Zealand have agreed in principle on a free trade agreement.

On the day the agreement comes into force, tariffs are to be abolished on 97 percent of the export products of both countries.

"This is a great trade deal for the UK that will cement our long-standing friendship with New Zealand and strengthen our ties with the Indo-Pacific region," said Prime Minister Boris Johnson.

His New Zealand counterpart, Jacinda Ardern, spoke of the best deal of its kind that her country has struck so far.

He uses "New Zealand's economy and its exporters".

Johnson is looking for new alliances after Brexit and moving away from trade with the European Union.

He had already signed a trade agreement with Australia in June.

However, the agreement with Australia already sparked protests from British farmers and thus also a crucial test in Johnson's cabinet.

Even now, agricultural associations fear that duty-free meat imports from New Zealand could put British sheep and cattle farmers at a disadvantage.

The agreement is also intended to abolish customs duties on dairy products and wine, which is New Zealand's most important export product to Great Britain.

The direct economic effects on the UK economy are considered insignificant according to analyzes from 2019 and 2020.

An updated forecast is planned for the time of signing, there is no date for this yet.

In total, trade between the two countries last year amounted to £ 2.3 billion.

A step towards a new trading bloc?

New Zealand expects the agreement to generate additional economic output of almost one billion New Zealand dollars.

For the country in the South Pacific, it will be the second agreement of this kind in 2021. In January, New Zealand signed a new pact with its largest trading partner China.

The negotiations had lasted almost two months longer than planned and were criticized by the opposition Labor Party.

Johnson's administration, however, sees the agreement as a further step towards joining the Trans-Pacific Trade Agreement (CPTPP).

Britain plans to join the trading bloc, which New Zealand is a part of, by the end of 20222.

dab / Reuters

Source: spiegel

All business articles on 2021-10-21

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