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Sensitive markets, such as beef, sheepmeat and cheese, were considered

A special report by the Agriculture and Horticulture Development Board (AHDB) assesses the implications of the Free Trade Agreement (FTA) between New Zealand and the UK. Under the deal, which was finalized on February 28, 2022, New Zealand agreed to eliminate all tariffs on UK goods from day 1 of the deal entering into force. The UK, in return, agreed to eliminate 96.7% of customs duties for New Zealand goods entering the UK from day one.

There are, however, some exceptions, including sensitive agricultural products, such as beef, sheepmeat and cheese. For these products, a transitional tariff quota (TC) will be applied.

For beef, tariffs will be eliminated over a period of ten years, according to the AHDB report. During this period, a tariff quota of 12,000 MT in the first year, increasing in equal installments to a tariff quota of 38,820 MT in the tenth year, will be applied. Any product exceeding the TRQ will be subject to the World Trade Organization (WTO) Most Favored Nation (MFN) tariff rate.

Between years 11 and 15, a product specific safeguard will be in place, limiting beef imports into the UK to 43,056 MT in year 11 and increasing in equal increments to 60,000 MT in year 15. Any product exceeding this safeguard will be subject to a 20% tariff. This safeguard will be removed after year 15, when trade in beef will be fully liberalized.

The tariff quotas were expressed in terms of volume, not carcass weight equivalent (CWE), which is an important consideration for the UK market, particularly for the beef sector.

In the dairy sector, customs duties on butter will be eliminated over five years in six equal reductions. The transitional quota will open at 7,000 MT and increase in equal increments to 15,000 MT in the fifth year.

Similarly, cheese will become duty-free over five years, with the transitional quota starting at 24,000 MT and increasing in equal increments to 48,000 MT by the fifth year.

Trade in butter and cheese will be fully liberalized by the sixth year.

In order to fully understand the implications of the agreement, AHDB examined the potential impact in partnership with Harper Adams University using the same approach that was developed for the analysis of the Australian FTA. The results of this impact assessment will be available later this year.