The Dairy Companies Association of New Zealand (DCANZ) is welcoming the signing of the United Kingdom – New Zealand free trade agreement (FTA) and looks forward to tariff-free dairy trade after 5 years.
“We are pleased that the final ink has been applied to the high-quality agreement that was reached in principle with the UK last year,” says DCANZ Chairman Malcolm Bailey. “This FTA is an important addition to New Zealand’s trade architecture. We welcome the UK’s ambitious approach to deepening its economic relations within our region.”
The UK is the world’s second-largest dairy import market, but over the last 49 years New Zealand exporters have had participation in this trade significantly curtailed by serious tariff disadvantages compared with European Union competitors. In 2021, New Zealand supplied less than 1% of UK dairy imports.
The endpoint of tariff elimination for all dairy products after 5 years will provide a long-awaited level playing field for New Zealand dairy exporters to the UK. UK consumers will benefit from the choice of high-quality and sustainably produced New Zealand dairy products.
“We congratulate Minister O’Connor and trade officials on reaching this milestone, and hope to see ratification and entry-into-force of the agreement this year,” says Bailey
The agreement will provide new trade opportunities for New Zealand dairy exporters from day one. All dairy products except butter and cheese reach the point of duty-free trade over three years. For butter and cheese transitional quotas will provide commercially meaningful access during the 5-year transitional tariff elimination period. New Zealand cheese exporters will have access to a tariff-free quota which starts at 24,000 tonnes and grows to 48,000 tonnes over five years. For butter, a duty-free quota with a starting volume of 7,000 tonnes grows to 15,000 tonnes over the 5-year period.
“This is an outstanding outcome for a negotiation that has taken less than two years,” says Bailey. “At the same time, it is exactly the dairy market access outcome that should be expected in an FTA with a developed OCED economy. DCANZ will be looking for no lesser opportunity for commercially meaningful trade from day one and endpoint of complete tariff elimination in New Zealand’s FTA negotiation with the EU”.