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UK reaches trade deal with New Zealand, but it can add nothing to GDP | International trade

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Britain has reached a trade deal with New Zealand, a key ally, as ministers hope to curb countries’ dependence on China, but the deal is expected to devalue the UK’s gross domestic product.

Despite the Department for International Trade announcing the deal as an groundbreaking achievement that was a vital part of Boris Johnson’s commitment to leveling, the Prime Minister has been accused of selling British farmers.

Tariffs of up to 10% will be waived for a range of goods in the UK, including clothes, buses, boats and bulldozers. The price of sauvignon blanc produced from New Zealand, manuka honey and kiwi should go down after 16 months of negotiations.

Trade between the UK and New Zealand is now worth $ 2.3 billion a year, and the government said this would increase as the deal would make it easier for smaller businesses to penetrate the New Zealand market as well. remove barriers for advanced technology and service companies. with

It follows the latest trade agreement reached with Japan and the agreement reached in principle with Australia. The focus on the region is part of Johnson’s 10-year plan to shift the focus of UK foreign policy towards the Indo-Pacific, strengthening the alliance and position of democracies in the region to make them more competitive against China.

New Zealand is highly dependent on China for trade, with more than 30% of its exports going to Chinese markets. The country has been criticized in the past for adopting slightly softer rhetoric towards China than some of its allies, an attitude critics have claimed is a result of trade dependence. Foreign Minister Nanaia Mahuta has previously urged exporters to diversify and reduce their vulnerability to geopolitical shocks, like the trade war Australia is experiencing.

New Zealand opposition leader Judith Collins told the Guardian this month that by not securing a free trade agreement, the US and UK were leaving the door open for Chinese domination in the Pacific region.

Ardern said Covid-19 had taught the country that we need to have as many opportunities for our world-class products as possible to provide security for our leading manufacturers, our economy and our people.

The deal could boost New Zealand’s GDP by $ 970 million, or about 0.3%. However, recent years analysis by the UK government found that its effect on UK GDP is likely to have a limited effect in the long run being between a positive growth of 0.01% or a negative growth of -0.01%.

Boris Johnson said: This is a major trade deal for the UK, strengthening our long-standing friendship with New Zealand and furthering our Indo-Pacific ties. Businesses and consumers across the country will benefit, reducing costs for exporters and opening access for our workers.

New Zealand Prime Minister Jacinda Ardern said: It’s one of the best deals ever and secured at a crucial time in our recovery from Covid.

The deal will cut costs for exporters immediately, creating opportunities for New Zealand businesses to grow and diversify their trade, boosting the economy as it recovers from Covid-19.

Minette Batters, president of the National Farmers Union, said she would open the doors to countries for significant additional volumes of imported food, whether or not they are produced to our high standards, while providing almost nothing in exchange for farmers in the Kingdom United.

She added: We should all be concerned that there may be a major weakness in these agreements, especially for sectors such as dairy, red meat and horticulture. The government is now urging British farmers to walk with some of the most export-oriented farmers in the world, without the serious, long-term and properly funded investment in UK agriculture that can enable us to do so.

It is very worrying that we have not heard anything from the government about how it will work with agriculture to achieve this.

International labor trade secretary Emily Thornberry echoed the criticism, saying the deal would generate only 112 million extra exports for British firms compared to pre-pandemic levels. Referring to the price of a new national vessel, she claimed that the total value for businesses from the deal would be less than half the cost of the new yacht Boris Johnson.

Thornberry said it’s a deal whose sole winners are mega-corporations running meat and dairy farms in New Zealand, all at the expense of British farmers who are already struggling to compete. But for British jobs, growth and exports, this deal is another massive failure.

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2/ https://www.theguardian.com/business/2021/oct/20/uk-strikes-trade-deal-with-new-zealand-but-it-may-add-nothing-to-gdp

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