Quotas allowing imports of cheap New Zealand lamb and other goods will be shared out between Britain and the European Union after Brexit under a deal signed by both sides.
Restrictions on how many products can be imported into the EU on favourable rates are set across the bloc and concerns have been raised internationally that exporters could take a financial hit when the UK quits.
However, the British government has agreed with Brussels to divvy up the numbers of goods that can be brought in on low or zero tariffs based roughly on current rates.
It would mean products like lamb, which are imported into the UK in higher numbers than other parts of the bloc, would continue to be traded in similar numbers.
International Trade Secretary Liam Fox said the deal showed "real progress" and was part of the government's plans to minimise disruption to global trade.
The agreement has been set out in a letter from the UK and the EU to the World Trade Organisation, which regulates international trading arrangements.
No decision has been made on how long the tariff rate quotas, which have to be renewed regularly with the WTO, would be maintained in the long-term.
A former New Zealand trade negotiator has been appointed the Government's key adviser for securing trade deals with countries outside the European Union.
Crawford Falconer, who has previously described Brexit as a "enormous opportunity", will work with International Trade Secretary Liam Fox to draw up deals ready to go as the UK leaves the EU.
A former vice minister for international trade and foreign affairs and ambassador to the World Trade Organisation, the academic is currently a trade professor at Lincoln University.
It comes as Mr Fox prepares to visit Washington on Monday for talks about future trade links between the UK and the US after Brexit.
He said: "Britain is a great global trading nation and, as we leave the EU, we will embrace the world and seek to build an outward-looking Britain that is confident on the world stage.
"We're attracting the very best global talent to the Department for International Trade and as an international economic department Crawford brings extensive experience of trade negotiation and foreign affairs and will play a key leadership role, with ministers and the first permanent secretary as we further build our trade capability."
The government has faced criticism that it does not have the skills and manpower needed to carry out complex deals for the country's future after Brexit.
In his role as chief trade negotiation adviser and second permanent secretary at the Department for International Trade (DIT), Mr Falconer will be responsible for boosting the negotiating skills in the team as well as developing free trade agreements and market access deals outside the EU.
Officials said more than 3,000 people now work for the department.
Speaking earlier this year at the Legatum Institute think tank, Mr Falconer said Brexit was a "potential game changer" and countries like Australia, New Zealand and Mexico would want to work with the UK.
"It's a bit like somebody who has woken up after a long sleep. They don't quite realise that they are the sleeping giant," he said.
"I think there is a dawning realisation that there's a huge strategic opportunity."
Speaking about his appointment, Mr Falconer, who holds dual New Zealand/ British nationality, said: "As the UK prepares to leave the EU, it will be top of the Government's agenda to turn the enormous new opportunities opening up for the UK into win-win agreements with our trading partners around the globe.
"That will bring tangible new gains to us at home, and it will bring gains to those trading partners that join us.
"As the world's fifth largest economic power, the UK will bring much needed leadership to the international trade agenda. I am absolutely delighted to join this hugely exciting new journey."
The strategic view that Britain needs to be in the EU remains universal among New Zealand strategists. However the Leaves did not vote geopolitically but on domestic considerations including, apparently, resentment of immigration and of the unequal gains from trade. New Zealand has little alternative but to accept the direction the Brits are taking, albeit with regret.
Withdrawing from the EU is proving more difficult than anyone anticipated. Almost every week there is a revelation of an additional complication. Two years to negotiate the deal is just absurd, indicative of how little David Cameron, the previous British prime minister, had thought things through.
I do not think any informed person – anywhere in the world – takes seriously Theresa May’s view that Brexit represents no retreat, but rather that it will be the making of a ‘truly global Britain’ and that as a result the country will be ‘more outward-looking than ever before.’ The hard fact is that, as every New Zealander working in the international sector knows, being a small country isolated from the big trading blocs is a huge challenge. Sure, Britain is bigger than New Zealand but small compared to China, the EU and the US.
New Zealand’s interests will be challenged by Brexit. A couple of examples. We are currently in early negotiations with the EU over a free trade agreement. Almost certainly they will be delayed because the EU will be focusing on the Brexit negotiations; in any case they were going to be tortuous because they involve every member of the EU agreeing to the deal which, if it is of any significance to us, is going to affect their key farm interests.
Second, because of Brentry and subsequent multilateral negotiations, such as the Tokyo and Uruguay rounds, we already have various trade deals with the EU. However they are not with its individual members. What happens to them when one leaves?
For instance, there is a New Zealand sheep meats quota for the whole 28 countries; about two fifths of our lamb goes to Britain. That quota is ‘bound’, in effect it has a standing in international law and cannot be unilaterally abrogated. What happens to it if Britain leaves? We could insist that we will continue to have access for the whole quota to the remaining 27 countries and then negotiate a separate one with Britain outside the EU in exchange for trade concessions here. I imagine the EU will want us to agree that the quota be divided between the EU27 and Britain. The permutations are enormous; it will be a miracle if they are settled within two years, given there are many other examples like this involving other commodities and other countries.
So tiny New Zealand will be directly involved in some aspects of the Brexit negotiations even if we find it hard to get the EU 27 to focus on an FTA. Meanwhile, according to EU rules, Britain cannot begin negotiating trade agreements on its own behalf until after it leaves the EU.
During the Brentry negotiations, half a century ago, New Zealand’s negotiating strength included some ‘moral’ weight. At that time more people living in New Zealand said they were British-born than said they were Maori, underlining emotional attachments between the two countries. But those attachments have become attenuated with the external and internal diversification.
I won’t say we had a veto on Brentry in 1973, but undoubtedly the British government of the day wanted our support because it feared the anti-Brentry forces would use New Zealand to intensify their campaign.
That won’t happen this time. Instead of moral considerations we are going to have to depend upon the WTO rules. In principle that should mean that we will be no worse off – except where we have better deals than the legal bindings. And undoubtedly, we will suffer if the British economy suffers, as it is expected to. (However, except for some products, ties of sentiment mean New Zealanders tend to overestimate the importance of the British economy to us today.)
Moreover with a few exceptions, such as the RCEP (the Regional Comprehensive Economic Partnership of 14 Asian nations and Australia and New Zealand), other international trade deals are going to go be put on hold. That particularly affects our campaign to reduce world food protectionism in the interest of consumers and efficient farmers.
Of course, Brexit may not go ahead. A possible scenario is that when the deal is agreed, Britain will have a second referendum offering a real choice between the specific Brexit terms and Remain. May’s ‘hard-Brexit’ is designed to meet the demands of the extreme Brexiters, especially over migration, but it sacrifices a lot to do that. The softer Brexiters may reject the hard-Brexit terms. Already there is a growing group of doubters – Bregretters.
Although there are hard liners among the other 27 EU, who will not offer Britain an easy deal, one hopes commonsense will mean the 27 will leave open the option of Britain abandoning Brexit when the terms are settled and it becomes evident (to just about everyone) how painful the exit option is.
What may be crucial may be this year’s elections in France and the Netherlands, where immigration issues are expected to play an important role. Supposing that the electoral outcomes do not totally disrupt EU unity, it seems likely, nonetheless, that the EU will soften its commitment to free movement of labour. That would make it easier for Bregretters to change their minds.
Whatever, New Zealand’s global trading ambitions – especially over better access for its farmer products to protected markets – are going to have to be put on hold. But we will still pursue quality trade deals whenever the opportunities arise even if there are less of them.
| By Brian Easton published on pundit | March 6, 2017 ||
The British Prime Minister Theresa May spoke enthusiastically about the opportunities provided by the Commonwealth during a landmark speech on the British Government’s plans for Brexit.
Speaking at Lancaster House, London, Mrs May said, “I want us to be a truly Global Britain... A country that goes out into the world to build relationships with old friends and new allies alike.
“Even now as we prepare to leave the EU, we are planning for the next biennial Commonwealth Heads of Government meeting in 2018 – a reminder of our unique and proud global relationships.”
The next Commonwealth Heads of Government meeting is to be held in the UK with Her Majesty Queen Elizabeth II in attendance. Heads of state and senior officials from all of the 52 counties which make up the Commonwealth will be invited.
Throughout the much anticipated speech, the prime minister announced intentions to lead Britain to a single market with significantly increased trade between Britain and both the remaining EU members and countries outside Europe. She expressed her focus to build free trade agreements between Britain and emerging global superpowers, including some Commonwealth nations.
We want to get out into the wider world, to trade and do business all around the globe. We have started discussions on future trade ties with countries like Australia, New Zealand and India.She said, “We want to get out into the wider world, to trade and do business all around the globe. We have started discussions on future trade ties with countries like Australia, New Zealand and India.”
At the inaugural Commonwealth Trade Ministers Meeting taking place in March, trade opportunities post-Brexit will be high on the agenda. Ministers for economy, trade and industry from across the Commonwealth are expected to attend.
The Secretary-General, Patricia Scotland, welcomed Mrs May’s recognition of trade opportunities with Commonwealth nations. She said, “Countries like India, South Africa, Nigeria, Kenya, Jamaica and Sri Lanka have already asked the Secretariat to undertake a detailed analysis of the trade opportunities which may arise post-Brexit and the ways in which they can deepen their trading engagement with the UK.
The meeting of trade ministers in March will explore the existing opportunities within the Commonwealth and ways in which we can strengthen intra-Commonwealth networks, improve the way we trade and provide mutual support to boost competitiveness of our nations. Our research shows that when both partners are Commonwealth members, trade costs between them are 19 percentage points lower than other country pairs.”
| A PressReleasePoint release | january 17, 2017 |
Theresa May is expected to reveal the most detailed insight yet into her approach to Brexit negotiations, in a speech on Tuesday.
She will urge people to give up on "insults" and "division" and unite to build a "global Britain".
Downing Street said reports she may signal pulling out of the single market and customs union were "speculation".
It comes as the chancellor said the UK could "change its economic model" if it loses access to the single market.
The BBC's political correspondent, Chris Mason, said Downing Street was confirming little about precisely what Mrs May would say in her Brexit plan speech, but "a possible route map the prime minister could be preparing to follow is emerging".
Her desire to control immigration suggested giving up the UK's existing membership of the single market, he added, while her enthusiasm for trade deals with countries such as New Zealand implied leaving the customs union.
Several of Sunday's newspapers claim Mrs May will indicate she is prepared to outline a "hard Brexit" approach.
The Sunday Telegraph quoted a government source as saying: "She's gone for the full works. People will know when she said 'Brexit means Brexit', she really meant it."
In her speech, the prime minister is expected to call on the country to "put an end to the division" created by the EU referendum result.
She will urge the UK to leave behind words such as "Leaver and Remainer and all the accompanying insults and unite to make a success of Brexit and build a truly global Britain".
Mrs May is also expected to outline a commitment to building a Britain more open to the rest of the world while building a new relationship with EU countries.
On Friday, she met New Zealand's prime minister Bill English who said he wanted to negotiate a "high quality" free trade agreement with the UK once it left the EU.
Mrs May said she was looking forward to starting talks on what she called a "bold" new trade deal between the two countries.
Writing in the Sunday Times, Brexit Secretary David Davis said the government needed to persuade EU allies that a "strong new partnership" with the UK would allow the EU to prosper.
He admitted agreeing new terms would be "testing" and suggested there might be a transitional arrangement to ensure Britain's exit was a smooth process.
European Union leaders have talked up the prospects of a free trade agreement, saying it would send a strong political signal as protectionism takes hold elsewhere. They have even suggested it could be completed within three years.
Bill English arrived in Brussels today on his first official overseas trip as Prime Minister.
After meeting English, European Council President Donald Tusk and European Commission President Jean-Claude Juncker said they expected formal negotiations for the long-awaited free trade agreement between the EU and New Zealand to begin soon.
Tusk said it would further strengthen relations and made an apparent reference to the election of US President Donald Trump, the Brexit vote in the UK and the rise of Marine Le Pen's Front National party in the looming presidential elections in France.
"Such an agreement would not only boost sustainable economic growth, investment and job creation on both sides, it would also send a strong political signal of economic openness and trade at a time of protectionist pressures are on the rise not only on our own continent but also round the world."
Juncker also said he was "very eager" to conclude a trade agreement, but pointed to "difficulties" within the EU and globally.
"At least we are hopeful we will be able to make the progress we need. There are remaining difficulties, but we will solve these problems, like others, because New Zealand is a very strong ally of the European Union and we want to continue in that vein.
Despite that, Juncker was optimistic a New Zealand-EU deal could be finalised in three years - half the time it usually took and less than a third of the 10 years it took for Canada. He said it usually took between 5-10 years.
"But I do think two or three years would be enough because we have very similar situations. We are friends, we are allies. We know each other and I think this could be done in a shorter period of time than it is usually done."
English said there was agreement to start negotiations as soon as possible. He noted New Zealand and the EU had signed a agreement as a precursor to a trade deal last year. It takes effect tomorrow.
"I thank the President [Juncker] for his leadership and for the Commission's clear willingness to remain open for business on trade agreements despite some of the political challenges that go with it."
He said the EU was the second largest economic entity and New Zealand's third largest trading partner, so it was important to a small country that relied on trade.
"It is my expectation we should be able to promptly conclude a trading agreement that opens up opportunities for our businesses, small and large, and underscores our shared values."
New Zealand is one of only six World Trade Organisation countries that does not yet have a trade agreement with the 28 member states of the EU, but recent agreements have been bogged down.
It took Canada 10 years of talks and was nearly derailed after a member state objected. The European Court of Justice is also soon to rule on whether member states' Parliaments need to ratify the Singapore agreement - a process that would delay and possibily derail some agreements.
English made it clear New Zealand would not take sides as Britain prepared to leave the EU, saying both were important to New Zealand.
"I strongly reaffirmed New Zealand's commitment to continue working constructively with the EU and the UK throughout this process. I noted the importance that both sides closely engage with third parties, like New Zealand, as the process evolved to minimise uncertainty."
When English was asked whether he thought New Zealand would get a better deal with the UK if it split completely from the single market of the EU, Juncker replied promptly with a "no" - drawing laughter.
English said New Zealand had a longstanding relationship with the UK and was ready to negotiate with them when the time came.
However, Tusk also signalled New Zealand should do more to help with the refugee crisis, saying it was a "global responsibility".
A new paper backed by former Australian prime minister Tony Abbott is calling on the UK to quit the EU's customs union and focus on Commonwealth trade after Brexit.
The report, authored by Tory Braintree MP James Cleverly, suggests a five step approach to Britain's trade priorities, beginning with the Commonwealth’s open economies.
After setting up “easy win” deals with Australia, Canada, Singapore and New Zealand in time for Brexit in 2019, the UK should pivot to negotiations with India, before deals with the Commonwealth nations of Africa, the Caribbean and the Pacific.
Finally, Cleverly said the UK should join the Trade in Service Agreement, a US-EU-Australian deal with is geared towards services.
Brexit trade minister and North Somerset MP Liam Fox has admitted Britain will have to effectively have the same trade agreements with other countries around the world – even after leaving the European Union.
Dr Fox announced he has opened discussions with 164 other countries in the World Trade Organisation, but because Britain has just two years before it leaves the EU, he will have to 'replicate as far as possible' the current agreements and 'obligations' to the World Trade Organisation.
And that - given the Brexit campaign was won largely on the basis of the promise of bespoke trade deals between Britain and other major countries outside the EU, like Brazil, China and the US – has caused criticism from Brexit campaigners.
Whitehall officials said Dr Fox's announcement is the first and necessary part of the process of leaving the EU, but the International Trade Secretary is in a Catch-22 situation because although Britain needs trade agreements in place with other countries outside the EU, most of the 164 members of the World Trade Organisation are waiting to see the deal Britain strikes with the EU on the terms of Brexit.
Trade Minister Todd McClay today published a summary of what New Zealand businesses think about Brexit and the impact they believe it could have on trade with the United Kingdom – New Zealand’s fifth largest trading partner.
This follows a public consultation held earlier in the year to better understand the position of New Zealand exporters and investors into the UK market.
A total of 18 submissions were received, with businesses sighting a combination of potential opportunities and challenges from the United Kingdom’s decision to separate from the European Union.
“Understanding the views of New Zealand businesses is fundamental to ensuring that the Government focuses on the areas that count for our exporters,” says Mr McClay.
Some businesses thought the UK might move towards a more open market and indicated that this could boost trade. Several companies emphasised the importance of the UK and the EU respecting their WTO commitments.
Conversely, a number of submitters expressed the view that the UK may adopt a move towards greater protectionism.
“Specifically, some businesses saw an opportunity for the UK to streamline standards and compliance, which would impact positively on trade,” says Mr McClay.
“Last month, I established a trade policy dialogue with UK, laying the foundations for a more formal trading relationship with the UK once it is in a position to negotiate independently of the European Union.
“Yesterday, in London, I met with Alok Sharma, the UK Minister for Asia and the Pacific and reiterated New Zealand’s intention to work with the UK to preserve and enhance our important and longstanding trade relationship.
“I have had similar conversations with UK Trade Minister, Liam Fox, and am grateful for the assurances that New Zealand’s trade interests will be protected in this changing environment.
“This latest feedback from New Zealand businesses will help to ensure that we safeguard New Zealand’s interests as this process unfolds,” says Mr McClay.