Trade

NZ launches free trade talks with UK

While trade talks with the European Union have hit a cow-shaped roadblock, its ex-partner the United Kingdom has stepped up to the table to negotiate an FTA with New Zealand

New Zealand has formally launched free trade negotiations with the United Kingdom, with hopes a swift deal could assist with the country's post-Covid recovery.

The two countries announced the start of FTA talks on Wednesday afternoon, offering a new avenue for trade progress.

While there have been preliminary scoping discussions between the two countries since March 2017, official negotiations could only begin after the UK formally left the European Union at the end of January this year.

NZ-EU trade talks have been under way since 2018, but appear to have hit an obstacle in the form of an inadequate offer on agriculture access for Kiwi exporters.

Trade and Export Growth Minister David Parker lashed out at the leaked EU offer in a speech last week, saying New Zealand could walk away from the table if there was no improvement.

“They've got a two-to-one trade surplus with us, they want us to give ground on geographic indicators and various other things that are important to them, and they think that we can convince New Zealanders this would be wise," Parker told Newsroom at the time.

In a statement announcing the start of talks with the UK, Parker said it made more sense than ever for the two countries to work more closely together in a post-Brexit environment.

Trade and Export Growth Minister David Parker has described the UK as one of New Zealand's oldest friends. Photo: Lynn Grieveson

“As the UK embarks on its next steps post-Brexit, New Zealand is pleased to be among the first countries to negotiate a trade agreement with one of our oldest friends,” Parker said.

The Government hoped a deal would include wins for small- and medium-sized businesses, Māori exporters, and regional communities, with the removal of trade tariffs and new approaches to non-tariff barriers at the top of the list.

Parker said New Zealand also wanted to break new ground on trade provisions that supported sustainable development, including climate change.

“As the global economy continues to be severely impacted by the effects of Covid-19, we are more committed than ever to concluding a bilateral FTA capable of delivering significant benefits to the people of both New Zealand and the UK.”

The UK is New Zealand's sixth-largest trading partner, with two-way trade worth about $6 billion in 2019.

The first round of negotiations is set to take place by video conference in mid-July.

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