The draft agreement, drawn up after 16 months of negotiations, is the last brokering by the UK after its departure from the European Union.
The agreement is not expected to boost the British economy. But Downing Street said it hoped it would “pave the way” for Britain to join Trans-Pacific Partnership (CPTPP), which is a free trade area of 11 countries in the Pacific, including New Zealand.
”This is a great trade deal for the UK, confirming our long-standing friendship with New Zealand and strengthening our relations with the Indo-Pacific”– PM Boris Johnson said in a statement.
Trade between the UK and New Zealand accounted for £ 2.3 billion ($ 3.2 billion) in 2020, which is less than 0.2% of all UK trade. The deal is not expected to increase the UK’S GDP, according to the UK government’s own estimates.
The UK’s ability to negotiate its own trade policy has been described by the government as a major benefit of Brexit. it has moved forward with deals with New Zealand and Australia despite the opposition of British farmers, who fear that the agreements will allow cheap imports.
The rush to sign new trade agreements is because Britain wants to compensate for the lost economic benefits of EU membership. The EU accounted for 42% of UK exports of goods and services and 50% of imports in 2020, and businesses face new trade barriers after Brexit. Britain also concluded agreements with Japan and Norway, but these were based on existing agreements negotiated by the European Union.
Johnson said New Zealand products that British consumers love will be more affordable, from Sauvignon Blanc wine to manuka honey and kiwifruit.
New Zealand Prime Minister Jacinda Ardern described the countries as”close friends and close partners”.
“The historical ties that bind us deeply,” she said, adding that the agreement is “good for our economy, our businesses and our people.”