Brexit: The UK and the European Union
The United Kingdom (UK) is scheduled to formally leave the European Union (EU) on 29 March, 2019. The UK’s departure will have a range of implications for New Zealand and New Zealanders. The nature and extent of its impacts will be determined by the terms under which the UK exits. In particular, a ‘no-deal Brexit’ would have significant implications for the parties and for third countries like New Zealand, particularly for exporters trading into Europe through the UK.
On 13 November, UK and EU negotiators reached a provisional agreement on the details of the UK’s exit from the EU and a political declaration on the framework for their future relationship. The UK Cabinet endorsed the agreement on 14 November. The agreement now needs to pass through a number of additional UK and EU processes before it can enter into force, including consideration of the draft Withdrawal Agreement by EU member states on 25 November and a vote in the UK parliament.
Both sides have indicated their desire to reach a deal in time to ratify the agreement in both systems and pass enabling legislation in the UK prior to the UK’s departure in March. That would avoid the disruptions to trade and the movement of people that a 'no deal' scenario is likely to bring about.
Read the draft agreements:
New Zealand has strong relationships with the EU and UK and these will continue. The New Zealand Prime Minister, Ministers and government officials will continue to work closely with the EU and the UK to protect and enhance our relationships with both the UK and EU as the UK moves to exit the Union.
The UK’s departure will have a range of implications for New Zealand and New Zealanders. The nature and extent of these impacts will be determined by the terms under which the UK exits. The terms of the provisional agreement have been published and will be carefully examined for their impact on third countries, including New Zealand. Although a provisional agreement has been reached by negotiators and endorsed by the UK Cabinet, the number of remaining steps in the process means that several scenarios remain possible, including that the UK departs the EU without a deal.
The provisional agreement reached by UK and EU negotiators includes a transition period until the end of 2020. During the transition period, existing conditions of trade access for third countries would continue and the UK and EU would negotiate the terms of their future relationship. Without an agreement in place, there will be no transition period.. This is what people are calling a ‘no-deal Brexit’.
The New Zealand Government is paying close attention to how Brexit unfolds, to ensure New Zealand’s interests are maintained and advanced. We are engaged at all levels, with decision-makers in the UK and the EU, particularly on trade and economic matters. Our aim is to ensure we limit disruption as much as possible to those New Zealanders affected by any Brexit outcome.
We are undertaking contingency planning for a range of scenarios, including the possibility of a no-deal. We are working to protect our current market access to both the EU and the UK, including under the EU’s WTO tariff rate quotas. We are engaging regularly with decision-makers in the UK and EU to stress the importance of arriving at an outcome that leaves us no worse off.
As the deadline for agreeing the nature of the post-Brexit relationship approaches, New Zealand officials are encouraging potentially affected stakeholders to put in place contingency plans for a range of scenarios, including the possibility that no deal is reached between the UK and the EU, to ensure trade and travel are not disrupted.
There will be no change to the rules covering our trade and investment, or people-to-people links with the UK and EU, while the UK remains a member of the EU. Agreement on a transition period as part of the UK’s withdrawal will limit any sudden changes.
Both the UK and EU have issued advice about how to prepare if the UK leaves the EU with no deal.
The UK Government has issued technical notes in order to help businesses and individuals understand the implications for them of a ‘no deal’ scenario. These cover a range of topics, including: Importing and Exporting; Product Labelling and Product Safety; Travelling between the UK and the EU; Taxation; Regulation of medicines and medical equipment; Workplace rights; Applying for EU-funded programmes; Civil nuclear and nuclear research; Farming; Driving; and State Aid. These can be found here (external link).
The EU Commission and EU Member States have published Preparedness Notices which identify the consequences of a UK withdrawal without an agreement. These can be found here (external link).
New Zealand businesses may in particular wish to review the guidance on importing to and exporting from the UK and the EU under a ‘no deal’ scenario.
Individuals may wish to consider how a ‘no deal’ scenario could affect them, with regard to residency, education and employment. Businesses and individuals may want to consider seeking legal advice and/or engaging a migration agent, customs broker, freight forwarder or logistics provider to support in preparing for all eventualities, including a ‘no deal’ scenario.
This page will be updated as further information is received. This is not intended to be, nor should it be relied upon, as a substitute for legal or other professional advice.
If you have further questions or concerns about how Brexit may impact on you, contact us on DM-EUR@mfat.govt.nz.
What will happen to trade between New Zealand and the UK? What about New Zealand trade with the rest of the EU?
New Zealand hopes to conclude a bilateral Free Trade Agreement (FTA) as early as possible once the UK is in a position to do so. The UK Government identified New Zealand as a priority for FTA negotiations following its departure from the EU.
In the meantime, the same rules will apply to our trade with both the UK and the EU until the UK formally departs the EU.
These include the range of areas incorporated in the EU’s commitments under the World Trade Organisation, which cover the UK. These WTO commitments include Tariff Rate Quotas that provide access for important New Zealand exports, such as certain meat and dairy products.
In July, the UK and EU notified WTO Members of their proposal to split the EU’s current WTO bound tariff rate quotas post Brexit. New Zealand and other quota holders have made clear that this approach would not be acceptable, as it would reduce exporters’ current access by removing their flexibility to respond to changes in market demand between the UK and the EU27 markets.
The UK will remain a close, fundamental partner for New Zealand.
On issues such as defence, security and immigration the bilateral relationship between New Zealand and the UK is not for the most part linked in any way to the UK’s EU membership. They are either bilaterally managed or are governed by arrangements separate from the EU.
The Government is keeping a close eye on agreements or arrangements that provide a framework for the UK-NZ relationship and will seek to protect and promote these if it seems likely they will be affected by the UK’s exit from the EU.
Negotiations towards an EU-NZ free trade agreement will continue without the UK after it leaves the EU. We launched these negotiations in June 2018 and negotiators met for a second round in October in New Zealand.
Find out more information on the EU-NZ free trade agreement negotiations.