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UK-New Zealand FTA enters into force; expected to boost NZ's economy

31 May '23
2 min read
Pic: Shutterstock
Pic: Shutterstock

Insights

  • New Zealand's FTA with the UK takes effect today, potentially boosting the nation's GDP by up to $1 billion annually.
  • Prime Minister Chris Hipkins highlighted this as one of 7 successful FTAs negotiated recently.
  • Businesses are expected to save around $37 million instantly.
  • Minister O'Connor stressed the FTA's role in easing cost pressures and creating jobs.
New Zealand businesses are set to enjoy significant financial benefits from a free trade agreement (FTA) with the United Kingdom, which officially comes into effect today.

Prime Minister Chris Hipkins announced the commencement of the agreement, highlighting it as one of the seven new or upgraded FTAs successfully negotiated by the labour government to date.

"The economy is through the worst, with inflation having peaked and set to return to the target range next year, alongside healthy growth and an influx of workers to address skill shortages,” Hipkins said in a statement.

The Prime Minister further emphasised that the trade agreement would bolster the national economy significantly, predicting an annual GDP increase of up to $1 billion.

New Zealand businesses will experience immediate financial benefits. "Our earlier than expected implementation means that from today New Zealand businesses will immediately save around $37 million dollars, thanks to the instant elimination of tariffs and new duty-free quotas covering 99.5 per cent of current exports," Hipkins explained.

Trade minister Damien O’Connor echoed the Prime Minister's sentiment, underlining the tangible benefits of the trade agreements to everyday New Zealanders. "Trade agreements can at times feel more academic than tangible, that is until the savings begin to flow through, saving businesses millions and boosting jobs for Kiwis,” O’Connor said.

O’Connor also noted the expansion of export goods covered by an FTA, which has grown from 52.5 per cent to 73.5 per cent since 2017. The minister underscored the vital role of these agreements in promoting export growth and supporting New Zealand businesses to overcome international trade challenges.

He highlighted how the UK FTA would alleviate cost pressures for exporters, expand opportunities for small businesses, and foster job creation during a cost-of-living crisis. "One in four jobs depend on trade – showing the importance of trade to our nation’s growing economy," O’Connor stated.

Fibre2Fashion News Desk (KD)

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