Australia deal sets the benchmark for a credible NZ-UK FTA

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Following the UK’s agreement to eliminate tariffs on Australian dairy products over 5 years, the Dairy Companies Association of New Zealand (DCANZ) is urging the UK and New Zealand Governments to move forward with a deal that ensures New Zealand dairy exporters are no worse off.

“In a short number of years, Australian dairy products will have the same tariff-free access to the UK market that EU dairy products have enjoyed for nearly half a century,” says DCANZ Chairman Malcolm Bailey. “It is critical that the New Zealand-UK agreement achieves complete tariff elimination for New Zealand dairy products within the same timeframe”.

The UK is the world’s second-largest dairy importer, and its dairy imports are dominated by EU product which is accorded duty-free access. The choice of New Zealand dairy products has largely been taken off the table for British dairy importers by trade barriers. Outside of limited quota volumes, New Zealand butter and cheese tariffs equivalent to 45% of the product value. Even within the current quotas, which were reduced significantly in size post-Brexit, New Zealand exporters face tariffs equivalent to 5% for cheese and 17% for butter.

DCANZ assesses the UK-Australia agreement endpoint of duty-free dairy trade after a five-year transition as being what should be expected. It is notable that the UK dairy market has been fully liberalised for imports from the world’s largest dairy exporter (the EU) for a long period of time.

In addition to a timely transition to tariff-free trade, the NZ-UK FTA should deliver an ambitious degree of opening of the UK market for New Zealand products from entry into force, which reflects New Zealand’s role in global dairy trade.

“New Zealand should accept no less from its FTA with the UK than the access already accorded to other dairy exporters” says Bailey.