UK signs trade deal with New Zealand – but that might add nothing to GDP | International exchange

Britain has struck a trade deal with New Zealand, a key ally, as ministers hope to stem the country’s dependence on China – but the deal is unlikely to add any value to gross domestic product from the United Kingdom.

Although the Department for International Trade called the deal a “breakthrough” achievement which was a “vital part” of Boris Johnson’s commitment to level up, the PM has been accused of selling off British farmers.

Tariffs of up to 10% are expected to be removed on a range of UK goods, including clothing, buses, ships and bulldozers. The price of sauvignon blanc, manuka honey and kiwifruit produced in New Zealand is expected to drop after 16 months of talks.

Trade between the UK and New Zealand now stands at £ 2.3 billion a year, and the government said this would increase as the deal would make it easier for small businesses to enter the neo market. -Zeeland – as well as removing barriers to advanced technology and service businesses.

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

New Zealand relies heavily on China for its trade and has therefore been less vocal than its Western allies at times in its criticism of.

However, last year’s analysis by the UK government found that its effect on UK GDP would likely have “a limited effect … in the long run” – between positive growth of 0.01% and negative growth of – 0.01%.

Boris Johnson said: “This is an excellent trade deal for the UK, cementing our long friendship with New Zealand and strengthening our ties with the Indo-Pacific. This will benefit businesses and consumers across the country, lowering costs for exporters and opening up access for our workers. “

New Zealand Prime Minister Jacinda Ardern said: “This is one of our best deals ever and secured at a crucial time in our recovery from Covid.”

“This deal will immediately lower costs for exporters, create opportunities for New Zealand businesses to grow and diversify their business, while boosting the economy as we recover from Covid-19. “

Minette Batters, the president of the National Farmers Union, said she would open the country’s doors to “significant additional volumes of imported food – whether or not produced to our own high standards – while not ensuring almost nothing in return for British farmers “.

She added: “We should all be concerned that there is a huge downside to these deals, especially for sectors such as dairy, red meat and horticulture. The government is now calling on UK farmers to take on some of the most export-oriented farmers in the world, without the serious, long-term and properly funded investment in UK agriculture that can allow us to do so.

“It is incredibly disturbing that we have heard almost nothing from the government on how it will work with agriculture to make this happen.”

Labor shadowy international trade secretary Emily Thornberry echoed the criticism and said the deal would generate just £ 112million more exports for UK businesses than pre-pandemic levels. Referring to the price of a new national flagship, she said the total business value of the deal would be “less than half the cost of Boris Johnson’s new yacht”.

Thornberry said: “This is a deal where the only big winners are the mega-companies that run New Zealand’s meat and milk farms, all at the expense of UK farmers who are already struggling to compete. But for UK jobs, growth and exports, this deal is another massive failure. “


Source link

Comments are closed.