By Ka Long Tung | Contributor
Prime Ministers Boris Johnson and Jacinda Ardern agreed on a trade deal during a video call on October 20, that would see British consumers pay less for imports from New Zealand. Critics say the deal won’t benefit the UK very much and may even put farmers at risk.
British exports such as cars, buses, and construction vehicles will benefit from the removal of 10% tariffs, while clothing, chocolate, cheese, and crisps will no longer be imported at a 5% tax.
Labour’s shadow international trade secretary, Emily Thornberry, said the total value businesses stand to gain from the agreement would be “less than half the cost of Boris Johnson’s new yacht”.
Thornberry went on to say, “It is a deal whose only major winners are the mega-corporations who run New Zealand’s meat and dairy farms, all at the expense of British farmers who are already struggling to compete.”
Trade between the two countries was worth £2.3bn last year, equivalent to just 0.5% of the UK’s commerce with the European Union. According to a report conducted by the government itself, a trade deal with New Zealand could have “limited effects” – between -0.01% to 0.01% – on the UK’s GDP in the long run.
Minette Batters, the National Farmers Union president, echoed the criticism, stating that “the government is now asking British farmers to go toe to toe with some of the most export-oriented farmers in the world, without the serious, long-term, and properly funded investment in UK agriculture that can enable us to do so.”
“It’s incredibly worrying that we’ve heard next to nothing from the government about how it will work with farming to achieve this.”
Despite all the criticism, the trade deal is expected to pave the way for trade agreements with more countries and help to counter New Zealand’s reliance on China.
New Zealand, Australia and Japan are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Last year, the UK signed a deal with Japan. It then signed a draft trade agreement with Australia in June. The trade deal with New Zealand may boost the UK’s appeal to the CPTPP.
Ramzan Karmali, BBC business reporter wrote: “The trade deal the UK really wants is with the US.”
New Zealand opposition leader Judith Collins told the Guardian earlier this month that by not providing free trade agreements, the US and UK were “leaving the door open” to Chinese dominance in the Indo-Pacific region. This can also partially explain why the deal was struck.