The land of wine and honey

Credit: Original article can be found here

EDITORIAL: Almost overnight, British Prime Minister Boris Johnson has gone from being a somewhat clownish figure to a great friend of New Zealand who may even be able to right a terrible historical wrong.

The UK’s free trade agreement with New Zealand is its third deal in a post-Brexit environment, following ones with Japan and Australia. And it appears that Europe’s loss is New Zealand’s gain.

Prime Minister Jacinda Ardern talks via webcam to UK Prime Minister Boris Johnson to discuss the Free Trade Agreement.

Stuff

Prime Minister Jacinda Ardern talks via webcam to UK Prime Minister Boris Johnson to discuss the Free Trade Agreement.

As the British media was quick to point out, the deal adds nothing to the UK’s gross domestic product (GDP) and risks upsetting British farmers. But the deal is favourable to us. New Zealand can expect to see a $970 million boost to GDP over 15 years, with our winemakers and honey producers being the initial beneficiaries.

The British see New Zealand as the land of wine and honey. Wine is our largest export to the UK, worth $463.1m per year. When the deal comes into force next year, $14.1m in tariffs on wine will fall away, just as they will on honey, onions and hoki.

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Who knew that we have an onion trade with Britain worth $8m per year?

Tariffs on apples and mussels survive for another three years. Tariffs on butter and cheese decline before vanishing entirely after five years.

Tariffs on sheep meat and beef, which currently sit at around $500 per 100kg, will endure for 15 years. By contrast, tariffs on Australian sheep meat and beef will be gone after only 10 years.

Dropping meat tariffs from both countries any sooner would have been political suicide for Johnson. As it stands, there has been immediate backlash from the UK’s National Farmers Union, concerned about British farmers going “toe to toe with some of the most export-oriented farmers in the world”.

Others say that while it’s a good day for British drinkers, it’s not so good for British farmers.

Our own Trade Minister, Damien O’Connor, concedes there has been some “wariness and paranoia” on the part of British farmers.

Meanwhile, New Zealand sheep and beef farmers might look across the ditch and wonder why their Australian equivalents are going tariff-free more quickly.

In return, New Zealand consumers will be able to buy tariff-free chocolates, gin, clothing and cars.

“Welsh auto companies that exported £3.4m ($6.5m) of road vehicles to New Zealand last year will now benefit from the removal of tariffs,” the UK Government announced.

You can also expect to see more British lawyers and architects working here.

But the greater benefit for the UK is the post-Brexit positioning and a reangling towards “the Indo-Pacific”.

The UK has applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes New Zealand, Australia, Japan, Canada, Singapore, Mexico, Vietnam and others in the Asia-Pacific region.

While the free trade agreement with us is worth little to the UK on its own, it is a vital stepping stone towards a new arrangement.

For some New Zealanders, the deal also has sentimental value. The UK’s entry into the European Economic Community (EEC), as it was then called, in 1973 has an almost mythical status in this country, as a turning point that has been described as an emotional betrayal akin to the severing of a parent-child relationship.

While we can’t wind the clock back, Johnson’s clumsy but well-meaning reminder that we share a common language of rugby recalled that we have other, more serious and enduring cultural and historical connections with Britain.