Trade Minister Damien O’Connor after signing the New Zealand-UK Free Trade Agreement with UK Trade Secretary Anne-Marie Trevelyan, in London.
The UK Free Trade Agreement will free up considerable revenue for the primary sector, as tariffs and duties will be eliminated or reduced over time, depending on the outlook for the primary sector.
A spokesperson for the Department of Foreign Affairs and Trade said exporters of kiwifruit to the UK face an estimated total of $37.8 million in tariffs every year.
Primary sector exports, including dairy, meat, fish, horticulture, honey and forestry, accounted for around $18 million of duties paid to export products to the UK, while the wine, beer and spirits accounted for $14 million.
The Department for Primary Industries’ latest outlook for 2022 said wine, honey and onions would enter the UK duty-free when the deal comes into force at the end of 2022.
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Apple tariffs would be eliminated by 2025, with 99.9% of New Zealand’s existing horticultural exports entering the UK duty free from the start of the deal.
Some 46% of New Zealand’s current fish and seafood trade would enter the UK duty-free when the deal comes into force, according to the outlook.
Tariffs on butter and cheese would be eliminated over five years, with 100% of trade in dairy products free in seven years, according to the outlook.
Justine Arroll, head of trade strategy at Fonterra, said the dairy industry currently had little exposure to UK tariffs, with Fonterra exporting less than 1% of its total exports in 2021 to the UK.
That limited exposure was due to prohibitive tariffs, with New Zealand dairy exporters facing out-of-quota tariffs of around 45% for butter and cheese, Arroll said.
With the phasing out of all tariff restrictions over the next five years, a level playing field would be created with European Union exporters who were the main source of British dairy products. This could open up opportunities for Fonterra, Arroll said.
Beef would enter the UK duty-free after 10 years, according to the outlook.
Matt Conway, an analyst at the Meat Industry Association, said New Zealand could export beef to the UK under three quotas. The quotas had different duty rates.
One quota was a World Trade Organization (WTO) quota specific to New Zealand for 454 tonnes of high quality beef. The other two were open to all WTO beef exporters outside the UK. in 2021, New Zealand exported more than 1,000 tonnes of beef to the UK, Conway said.
It was not always clear what beef quota was sent to the UK under, as some exporters did not share trade information, but the tariff costs of red meat exports from New Zealand to the UK in 2021 were estimated between 1.8 and 4.8 million dollars per year. , Conway said.
Sarah Wilson, chief advocacy officer at New Zealand Winegrowers, said under the deal technical barriers to trade would be removed and certification and labeling requirements kept to a minimum.
Current tariff costs for wine depended on several factors, such as the packaging of the wine, the alcohol content, and whether the wine was still or sparkling. A New Zealand wine exported 80.005 million litres, or 106 million 750ml bottles of wine, to the UK in 2021, Wilson said.
The cost savings from waiving tariffs would vary from company to company. Wine exporters have also had to contend with widespread price increases, such as rising shipping costs, Wilson said.