New Zealand and the United Kingdom have today agreed to bring forward the entry into force of their Free Trade Agreement (FTA) to the end of this month, Prime Minister Chris Hipkins has announced.
From May 31, 99.5% of current trade will be able to enter into the UK duty-free through a combination of tariff elimination and duty-free quotas.
Hipkins called the deal "a gold-standard FTA" which reflects "the close relationship between our two countries".
"The market access outcomes are among the very best New Zealand has secured in any trade deal," Hipkins said.
UK Prime Minister Rishi Sunak said the FTA "marks a new chapter in the great friendship between our two countries".
READ MORE: NZ and UK free trade deal signed - 'worth up to $1 billion'
"This deal will unlock new opportunities for businesses and investors across New Zealand and the UK, drive growth, boost jobs, and most importantly build a more prosperous future for the next generation," he said.
Kiwi exporters will save approximately $37 million per year "in tariff elimination alone" when the FTA comes into effect late this month, Hipkins said.
"The UK is New Zealand's seventh largest trading partner and a crucial market for some of our key exports, so this should really help our economic recovery," he said.
Minister for Trade and Export Growth Damien O'Connor said the agreement is expected to boost New Zealand's GDP by up to $1 billion, and expand New Zealand's goods exports to the UK by over 50%.
"From day one 99.5% of current exports will enter the UK duty-free through a combination of tariff elimination and duty-free quotas," O'Connor said.
"This deal will cut costs for exporters, create opportunities for New Zealand businesses to grow and diversify their trade, and help tackle rising living costs by delivering quality, price-competitive UK imports."
Wine, honey and seafood exporters are among those expected to benefit.
The elimination of customs duties is expected to save exporters at least $25 million. Tariffs of up to 20% on seafood products will also be removed, O'Connor said.
Dairy and red meat sectors will also benefit with "significantly improved access to the UK's NZ$3 trillion consumer market for the first time in nearly 50 years".
In addition, the agreement will also see "forward-looking environmental commitments for both parties" by "incorporating a specific article on climate change and provisions to eliminate environmentally harmful subsidies".
"I'm proud of the work that's been done to get to this agreement finalised and excited for our exporters who are set to derive the benefits of it very soon," he said.
Working Holiday Scheme extended
Meanwhile, an upgraded Working Holiday Scheme will take effect from June 29 in the UK, and July 1 in New Zealand.
The extension of the programme, announced in July 2022, will see five years added to the eligible age for both schemes from 30 to 35.
It also includes an extension of the maximum period of time individuals can stay in New Zealand and the UK respectively, from two years — or 23 months in New Zealand — to three years; and an extension to the length of time individuals can work, allowing those in the UK and New Zealand respectively to work for the full duration of their three-year stay.
"Working holiday makers play a vital role in the New Zealand economy. We need their skills to meet workforce demand in industries like tourism, hospitality, agriculture and horticulture," Hipkins said.
Roughly 3500 people from the UK are working in New Zealand as part of the scheme.
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