Free Trade Agreement: New Zealand — House of Lords, 2021-10-25
Topic: Foreign Trade
James Younger (Conservative, Centre-right): I am grateful for the comments made by the noble Lords, Lord Grantchester and Lord Purvis, on this deal. I am very pleased to have the opportunity to discuss the proposed deal in this House. I will certainly pass on the compliments of the noble Lord, Lord Purvis, to my noble friend Lord Grimstone for keeping us all in touch with what is going on As the House will know, on 20 October 2021 the Government agreed the main details of the deal. The leaders reaffirmed the enduring partnership between the UK and New Zealand during their discussion and agreed to work closely together on important areas of mutual interest such as defence, technology collaboration and tackling climate change, including through a clean tech partnership. But, as the House will know, this is in effect an agreement in principle, not dissimilar to the Australia deal. The AIP document reflects what the UK and New Zealand negotiating teams have jointly decided as of 20 October should be included in the agreement I want to answer as many questions as I can. The noble Lord, Lord Grantchester, raised the subject of the accession to the CPTPP. As I think he and the noble Lord, Lord Purvis, acknowledged, this is an exciting opportunity for the UK. This agreement is a gateway into the CPTPP, which is a huge free trade area of 11 Pacific nations. Joining this group will mean more opportunities for British exports to those high-growth markets. Demand for beef and lamb is increasing in the Asian market, and CPTPP countries are estimated to account for 21% of global meat imports in 2030—which goes a little way to giving some statistics, particularly to the noble Lord, Lord Purvis I shall say a little more about this in a moment, but the deal does not undercut farmers. We have ensured that there will be protections for the industry, including staged tariff liberalisation to allow farmers sufficient time to adapt, as well as a general bilateral safeguard mechanism—I understand that, for certain sensitive goods, this will be up to 15 years. Goods that are exported to New Zealand are tariff-free, which I am sure noble Lords will know The concern about this deal being a threat to our farmers was, again, raised by the noble Lord, Lord Grantchester. New Zealand lamb complements British lamb. New Zealand and the UK have different lamb seasons—let us use the word counter-seasonality, which is the expression I have got used to. Our consumers have been buying high-standard, high-quality New Zealand lamb for years. The UK will not be flooded with Kiwi lamb. New Zealand already has tariff-free access through its WTO quota but in 2020 used less than half that quota, meaning that the Kiwis could already export more sheepmeat to us tariff-free but, interestingly, choose not to. I shall give some further statistics to the noble Lord: New Zealand sheepmeat exports to the UK have fallen by nearly half over the past decade, and New Zealand sheepmeat is already committed to the rapidly growing Asia-Pacific markets. In 2020, around half of its sheepmeat exports went to China, a country mentioned by the noble Lord, while 55% of beef exports went to Asia and the Pacific. In a nutshell, this is a great opportunity for UK farmers The opportunities for UK businesses are also worth mentioning. As I mentioned earlier, UK exporters will no longer have to pay tariffs on any goods. This means that they can do business at lower costs and gain an advantage over international rivals in the New Zealand import market, a market which is expected to grow, as was mentioned earlier, by around 30% by 2030. In addition, red tape will be cut for businesses which export to New Zealand, including 6,200 UK SMEs, opening up opportunities for more small businesses to grow their customer base abroad with the necessary online support. It is important to mention data. The free flow of trusted data, which is essential for modern businesses, will be guaranteed between the UK and New Zealand, making it easier for UK businesses trading digitally to break into the New Zealand market The noble Lord, Lord Grantchester, raised some questions about the National Farmers’ Union, which I am aware has expressed some concerns. I hope that I can reassure him and the NFU that we are carefully considering the individual combined effect of the agreements that we are negotiating, including enhanced export opportunities for UK agricultural producers. This agreement in principle with New Zealand is without prejudice to other trade deals, and we will consider each negotiation within the context of our trading relationship with that partner. There is no one-size-fits-all approach, which goes a little way to answering the question from the noble Lord, Lord Purvis, in relation to the EU. We are working closely across government to ensure that our trade policy does not undermine UK farmers and producers of agricultural goods and that any deal includes protections for the agricultural sector The noble Lord, Lord Grantchester, raised a point about standards. Perhaps I can give some reassurance by saying that, like the UK, New Zealand is a global leader in animal welfare, and both countries share a commitment to further improving and advancing our already high animal welfare standards. For example, the UK and New Zealand have both banned the use of sow stalls for pork production, and battery cages will be banned in New Zealand from 2022, having been banned in the UK from 2012 The noble Lords, Lord Grantchester and Lord Purvis, raised a point about the TAC. We know that it has just been set up, but I give the reassurance that we believe that it has been appointed and set up at the right time. Free trade agreement negotiations continue up until the moment of signature, and the commission will have ample time to do its job and report on the final deal. However, the TAC’s role is not, and never has been, to advise on live negotiations; it is a bit a further down the line The noble Lord, Lord Purvis, asked about rules of origin—I think he mentioned geographical focus. The rules of origin should ensure that only products made in the UK and New Zealand benefit under the agreement in principle, create opportunities for UK and New Zealand businesses to source better and cheaper inputs than currently and provide modern and predictable rules, making it as simple as possible for businesses, particularly SMEs, to trade with New Zealand using the preferential tariffs I think that there were other questions raised. I hope that I have covered some of them, but I appreciate the points raised. I shall look at Hansard and make sure that I write if I have to.