UK-NZ FTA entry into force: a major free trade milestone

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The Dairy Companies Association of New Zealand (DCANZ) welcomes the announcement that the free trade agreement (FTA) between New Zealand and the UK will enter into force on 31 May.

“This starts the clock on transitioning to completely duty-free entry into the UK market,” says DCANZ Executive Director Kimberly Crewther.

“After 1 January 2028, New Zealand exporters will have a level playing field with European competitors into the UK market for all dairy exports.”

DCANZ considers this to be a very high-quality outcome from a trade agreement and the precedent for any future FTA negotiations. DCANZ reiterates its previous congratulations to both the New Zealand and UK Governments on their shared ambition and leadership in bringing down barriers to dairy trade.

“We appreciate the hard work and effort that has gone into securing this high-quality outcome by New Zealand’s Trade and Export Growth Minister and his negotiating team. This is truly a free trade agreement in both name and form.”

The UK is a high-value market with discerning customers and consumers who value New Zealand provenance, sustainability, and safety credentials. It is the world’s second-largest dairy import market after China, but tariff disadvantages limited New Zealand to supplying just 0.1% of the approximately NZ$8 billion worth of dairy products the UK imported in 2022.

“Eliminating tariffs will give UK dairy customers and consumers an equal opportunity to choose high-quality New Zealand dairy products as they have for the European products that currently dominate the trade.”

On 31 May tariffs will be eliminated on a range of dairy products including liquid milk and cream, yogurt, buttermilk powder, and infant formula. The phase-out of tariffs on milk powder, lactose, whey, and other dairy proteins will be completed on 1 January 2026, and the tariff phase-out on cheese and butter will be completed on 1 January 2028.

Quotas will allow limited, but commercially meaningful, volumes of duty-free trade in cheese and butter during the transition period.

“Entry into force of this agreement is a major milestone for New Zealand dairy trade. Although the level of trade that eventuates will reflect commercial market demand and supply dynamics, the value of the opportunity the FTA provides to build commercial relationships with UK dairy customers and provide optionality for New Zealand exporters is significant.”