How does Brexit affect business?
From 1 January 2021 there will be some changes to the way New Zealand trades with the UK, as well as how New Zealand businesses trade between the UK and EU.
During the UK’s transition period, which lasts until 31 December 2020, New Zealand’s trade to the UK is subject to the same rules as the EU. From 1 January 2021 there will be some changes to the way New Zealand trades with the UK, as well as how New Zealand businesses trade between the UK and EU.
Preparing for 1 January 2021; a new UK/EU deal agreed
The UK and EU have negotiated a trade and cooperation agreement that is set to provide for preferential trading arrangements between the UK and EU from 1 January 2021. This agreement was announced on 24 December 2020. Further information, including the text of the deal, is available here: European Commission statement here (external link); United Kingdom statement here (external link).
Even though a deal between the UK and EU has been reached, New Zealand businesses will need to prepare for changes from 1 January 2021.
The New Zealand Government encourages businesses and individuals to put in place contingency plans, to minimise the effects of any disruption.
Key considerations for NZ businesses include:
- What volume of trade do you currently have with the UK and the EU and what are the potential supply chain implications?
- What guidance for importing to, and exporting from, the UK and the EU do you need? There is information available through the UK government and the European Commission Preparedness notices. See EU guidance (external link)
- Do you need legal advice and/or to engage a migration agent, customs broker, freight forwarder or logistics provider, to support you in preparing for all eventualities, including a ‘no deal’ Brexit?
- Does your supply chain involve shipping goods between the UK and EU; or vice versa? If so, are you seeking updates on the implications of changes at the border between the UK and EU?
- Are you likely to have large orders landing on 1 January 2021 or shortly after? If so, are you in close contact with your importer? Are there things you can do to prepare?
UK applied Global Tariff
From 1 January 2021, the UK’s new applied Global Tariff schedule will apply to New Zealand exports to the UK. Information on the new UK tariff is available here (external link).
Tariff Rate Quotas
The EU’s and UK’s WTO commitments include Tariff Rate Quotas (TRQs) that provide access for important New Zealand exports, such as meat, dairy and horticultural products. The UK and EU have initiated separate formal processes at the WTO in Geneva to split the EU’s current WTO bound tariff-rate quotas between the EU and UK once the UK’s transition period ends.
New Zealand and other quota holders have made clear that this approach would not be acceptable as it would reduce exporters’ access, including by removing their flexibility to respond to changes in market demand between the UK and the EU markets post-Brexit. Nevertheless both the EU and UK intend implementing these splits from 1 January. New Zealand has intensified its engagement with both the UK and EU from Ministerial-level down to resolve the issue in the run down to the end of the year.
A trade agreement between the EU and UK may mitigate some of the effects of the proposed TRQ splitting. But this will depend on the terms of the agreement and if it is successfully negotiated before the end of 2020.
To help ensure continuity and stability in the arrangements underpinning our trade, New Zealand and the UK have signed bilateral agreements on:
- Sanitary Measures Applicable to Trade in Live Animals and Animal Products (the Veterinary Agreement)
- Mutual Recognition in Relation to Conformity Assessment (the Mutual Recognition Agreement)
- Customs Agreement for Mutual Assistance on Administrative Matters
These agreements will come into effect when the UK’s transition period ends on 31 December 2020 and the UK is no longer subject to EU regulations.
The agreements will ensure continuation of arrangements New Zealand had in place with the UK when it was part of the EU. A statement containing more detail on the Veterinary Agreement and Mutual Recognition Agreement is available here (external link).
Continuity in recognition arrangements
The UK has confirmed it will continue to recognise existing arrangements for:
- exports of New Zealand organic products
- conformity checks for the inspection of fresh fruit and vegetables prior to export (in New Zealand’s case, specifically apples, pears and kiwifruit)
- fisheries catch certification
From 1 January 2021, the UK has indicated it will continue to implement the requirements under the EU General Data Protection Regulation (embodied in the UK Data Protection Act 2018). This will transitionally preserve the effect of the existing EU data adequacy decision for New Zealand.
In New Zealand’s case, entities transferring data out of New Zealand are subject to the New Zealand Privacy Act 2020. This will continue to be the case for outward transfers and will enable ‘business as usual’ to continue in respect of data transfers from New Zealand. The Privacy Act 2020 (external link) repealed and replaced the Privacy Act 1993, coming into effect on 1 December 2020.
EU-NZ free trade negotiations
Negotiations towards an EU-NZ free trade agreement were launched in June 2018. Negotiators met virtually for a ninth round, which concluded in early December 2020. Read more here EU-NZ free trade agreement negotiations.
UK-NZ free trade negotiations
Negotiations towards a UK-NZ free trade agreement were launched in June 2020. The first round was held virtually in July 2020, with a second virtual round concluding in November 2020. A third round is currently scheduled for late January 2021. Read more here UK-NZ free trade agreement negotiations.
The New Zealand Trade and Enterprise (NZTE) website has more information about Brexit-related changes for New Zealand exporters here:
Brexit and customs
Find out what Brexit means for New Zealand-UK customs on the New Zealand Customs Service website (external link).
Brexit and the primary sector
The Ministry for Primary Industries has information specific to the primary sector here (external link).
Summary of public submissions on Brexit
Following the United Kingdom’s vote to leave the EU, the New Zealand Government called for submissions from businesses which trade with or invest in the United Kingdom. The call for submissions was made in August 2016 and ran until October 2016.
Here is a summary of these submissions.
We will update this page as more 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 questions or concerns about how Brexit may impact on you, contact us at email@example.com
For export related enquiries, you can also call 0800 824 605. This number will be open over the December 2020 / January 2021 holiday period for Brexit-related enquiries. If you are put through to voice mail, please follow the instructions and your enquiry will be recorded and processed.