Economy

Minister expects negotiations with UK on free trade deal to be advanced

The Minister for Trade believes New Zealand can negotiate a free trade deal with the UK by the end of the year.

At noon tomorrow, the United Kingdom's 47-year relationship with the European Union (EU) will end - three and a half years since Britons voted in a referendum to leave.

But with another year of negotiations ahead as they finalise the fine print of the exit deal, it's not yet clear what the effects for New Zealand will be.

Minister David Parker told Morning Report New Zealand was ready to start negotiations as soon as the United Kingdom was ready.

"Their first priority will, of course, be the European Union, because that's their largest and closest trading partner but the prime minister Jacinda Ardern reaffirmed with Boris Johnson that we're ready to start trade renegotiations with them for their post-Brexit trade relationship with New Zealand in the near future.

"I think this year they will be advancing negotiations not just with the EU but also with United States, Australian, New Zealand and probably Japan."

Parker said he had met with his UK counterpart last week and while there was no specific date mentioned, they expect to start talks within months.

He was confident that New Zealand could negotiate a deal faster with the UK than with any other country.

"We're trusted long-term partners, we share institutional form, a lot of our institutions are based on theirs historically, and of course we're an open trading nation."

Meat exporters could also rest assured in the meantime, he said.

"We've already got interim arrangements in place with United Kingdom and Europe to make sure that the current arrangements are rolled over for the next year ... in respect of the period after that year of when the EU and UK are in negotiations, I can't quite give that cast iron guarantee but I can be confident that New Zealand's position will not be materially disadvantaged."

However, if a deal was still not in place by the time current interim arrangements were over, he said he would expect for those arrangements to be extended.

"But I'm hopeful that won't be the outcome, I think we should have a free trade agreement close to concluding by the end of that period [by the end of this year]."

He said there have been undertakings from the UK that New Zealand would not be worse off as a result of Brexit.

Another problem that's surfacing was to do with tariff rate quotas; allowing products imported within a volume limit to enter the EU's market at a lower tariff rate than for quantities outside the quotas.

"They're splitting that up between the UK and Europe in a way that reduces the flexibility of New Zealand's exports," Parker said.

However, New Zealand was not alone in negotiations over this element. Parker said other World Trade Organisation countries - like Australia and United States - were also looking to resolve the issue.

This article was originally published on RNZ and re-published with permission.

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