Benefits to New Zealand trade

Why is New Zealand negotiating a free trade agreement with the United Kingdom?

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Why is New Zealand negotiating a free trade agreement with the United Kingdom?

The United Kingdom is one of New Zealand’s closest and most important partners. We already have deep economic and people-to-people connections.

In the year to March 2020, we sold each other just over $6 billion worth of goods and services. We have substantial investment and R&D links.

But there is scope for us to do more through a free trade agreement that removes tariffs, addresses non-tariff barriers, and provides improved access for New Zealand services exporters and investors and companies wanting to bid for UK government contracts.

Conclusion of a high quality, comprehensive and inclusive FTA will:

  • be an important next step in growing New Zealand’s future economic relationship with the UK
  • create new opportunities for New Zealanders to grow their business in the UK
  • promote our sustainable development and inclusive trade objectives to enable the benefits of trade to reach all communities in New Zealand and:
  • contribute to New Zealand’s COVID-19 trade recovery strategy.

Benefits to New Zealand

A free trade agreement with the United Kingdom will bring benefits to New Zealand businesses, consumers and communities:

  • reducing the costs for existing trade and creating new opportunities to grow our goods and services trade to the UK;
  • making it easier for companies of all sizes to do business in the UK, including through digital means;
  • establishing a 'level playing field' for New Zealand businesses trading, operating and investing in the UK market;

  • strengthen collaboration with the UK across a range of trade and economic areas.

The United Kingdom has commissioned some initial modelling on the potential benefits of removing tariffs and addressing non-tariff barriers under a NZ-UK FTA. The research estimates:

  • An increase of up to $970 million to New Zealand's GDP*
  • An increase of up to 40% in New Zealand exports to the United Kingdom*
  • An increase of up to 7.3% in United Kingdom exports to New Zealand*

Further details on this analysis, its assumptions and limitations can be found here(external link).(external link)

* in year 15 after the FTA enters in force.


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