Stuff | 14 April 2021

Hopes for speedy trade deal with Britain unlikely: Kiwi exporters

by Catherine Harris

A British newspaper is reporting that momentum is picking up with New Zealand’s bid to clinch a free trade deal with Britain.

The Sun reported that the deal which would bring cheaper wine and meat to Britain had been making “rapid progress” as talks canvassed the issue of prices and jobs protection in both countries.

Britain’s fourth round of two-week trade talks with New Zealand kicked off on Monday night, but negotiations with Australia are also in the wings.

“New Zealand is likely to be the next big deal we get over the line," a source linked to UK Trade Secretary Liz Truss was quoted as saying.

“It is neck and neck between them and Australia but there’s every chance a Kiwi deal closes first. A deal would ­support jobs across Britain.”

However, Export NZ’s Catherine Beard and the Meat Industry Association said a deal with Britain was unlikely to be quite so imminent.

Beard said her information suggested New Zealand was being offered an improved market access arrangement, after the last one was ‘’pretty low-ball,’’ but any trade deal seemed likely to be months away.

‘’That might be a tactic to put pressure on Australia ... to create a sense of urgency,” she said.

Meat Industry Association chief executive Sirma Karapeeva also said the deal was far from sealed.

“There’s still a lot of work to do and while some chapters are being well progressed and are probably close to completion, I don’t think these two weeks now are the final stage of negotiations".

The UK is New Zealand’s sixth-largest trading partner, and two-way trade between the two nations was worth nearly $6 billion in 2019, $1.4b of it from New Zealand.

A Ministry of Foreign Affairs and Trade spokesperson said the ministry had seen the UK media reports, “but the desire to move at pace doesn’t outweigh our joint commitment to negotiate a comprehensive agreement that removes all tariffs”.

“There is still work to do to fully reflect that commitment. We’re looking forward to working on those areas and making good progress during this round of negotiations.”

Many New Zealand goods in Britain currently still attract a 20 per cent tariff. The country took much of New Zealand’s dairy, meat and wool until the early 70s when it joined the newly formed European Economic Community.

However, that changed in January when Britain finally separated economically from Europe, leaving it free to negotiate its own trade agreements.

While the British are hoping for cheaper wine and meat, New Zealand’s top five imports from the UK are vehicles, machinery and parts, electrical machinery, print products and pharmaceutical products.

Kimberly Crewther, of the Dairy Companies Association, said Kiwi dairy exporters were hoping that New Zealand would get a ‘’level playing field” with its European competitors which had ‘’duty free” access in Britain.

‘’The UK dairy market has been fully liberalised for those European dairy exports for 47 years. We’re asking that it’s about time they extend that same quality of import treatment to New Zealand.”

Karapeeva said there was still some unhappiness over the way Brexit had split New Zealand’s meat export quota between the UK and EU but she did not feel it should be part of the trade talks.

Brexit has split New Zealand’s quota for sheepmeat 50:50 between the UK and Europe, while the much smaller beef export quota was split 60 per cent towards Europe and 40 per cent to the UK.

Inside the quota, New Zealand sheep meat attracts no tariffs but it gets hit with a tariff of 50 per cent outside it.

New Zealand beef, a smaller market in Britain, draws tariffs of 20 per cent and 50 per cent respectively.

Karapeeva said the chief reason for annoyance was a loss of flexibility to shift meat around depending on market conditions.

"We’re still pursuing it, [but] it’s really important to know the splitting of the quota is quite separate and different from the trade negotiations.”

The UK’s Institute of Export & International Trade said in a post on Wednesday said one of the sticking point for Australia’s FTA was standards, with British farmers wanting Australia to match their standards in areas such as hormone treatments.