Environmental groups and National Farmers Union united in criticism of UK-New Zealand trade deal, which government hails one of its ‘greenest ever’
The government has hailed a new free trade agreement with New Zealand one of its “greenest ever”, while claiming it could boost the UK economy by £800m a year by removing trade barriers on a “huge range” of goods and services.
The Department for International Trade (DIT) announced the new free trade agreement (FTA) yesterday, publishing alongside it a “ground-breaking environment chapter” that includes text reaffirming the two countries’ mutual commitment to the Paris Agreement on climate change and their ambitions to achieve net zero emissions.
The chapter also promises to liberalise tariffs on the “largest list of environmental goods in any FTA to date”, including electric vehicles and wind turbines, in addition to encouraging trade and investment in low carbon services and technologies, according to the DIT.
Moreover, the deal promises to “slash red tape” for UK tech, creative and service companies, while also providing “new opportunities” for British businesses and delivering a near-60 per cent increase in trade between the two countries, the government said.
As such the agreement appears to take a stronger line on environmental issues than the controversial trade deal that was finalised with Australia last year. That agreement made only brief reference to climate action, amidst reports that a clearer commitment to decarbonisation was watered down at the behest of the Australian government, and prompted warnings from UK environmental and farming groups that it could allow for the import of Australian goods linked to deforestation and other forms of environmental damage.
However, the insistence that the New Zealand deal represents one of its “greenest ever” was once again given short shrift by UK green groups and farmers alike, who have warned the government’s approach to post-Brexit, international trade continues to assert few robust climate and environmental protections, and risks undercutting British farmers who are now set to face stiff competition from cheap antipodean imports.
Campaigners noted that the government’s own impact assessment indicates the deal could result in a “reallocation of resources” away from UK agriculture, forestry, fishing and semi-processed foods that could see these sectors take a collective hit of around £150m.
Under the new deal, tariffs will be eliminated on all UK exports to New Zealand, including current tariffs of up to 10 per cent on clothing and footwear, five per cent on buses and up to five per cent on ships, bulldozers, and excavators, according to the Department for International Trade.
It mirrors a similar approach to trade as that which underpins the UK’s free trade deal with Australia agreed last year, which removes all tariffs on goods and services, but enforces few of the same requirements for environmental, food safety, or animal welfare standards on Australian imports that British farmers have to meet.
International Trade Secretary Anne-Marie Trevelyan – who was formerly the government’s Energy and Clean Growth Minister – promised that as a result of the deal the UK’s trade with New Zealand “will soar, benefitting businesses and consumers throughout the UK and helping level-up the country”.
“Like all our new trade deals, it is part of a plan to build a network of trade alliances with the most dynamic parts of the world economy, so we set the UK on a path to future prosperity,” she added.
The government claimed the deal would make products such as white wine, manuka honey, and kiwi fruit from New Zealand more affordable for UK shoppers, and formed part of the UK’s strategy to deepen trade ties “with like-minded partners and create a more predictable, free and fair framework for UK businesses”.
Mike Cherry, national chair of the Federation of Small Businesses (FSB), hailed the deal as “a great step forward”. “New Zealand is a key market for UK small businesses – close to a third of smaller exporters already have ties to the nation,” he said.
However, green groups and farmers lamented the failure to embed more robust environmental standards into the deal following the controversy surrounding the Australia trade deal last year.
Katie White, executive director of advocacy and campaigns at WWF, said that despite efforts to consider environmental impacts, the new trade deal with New Zealand “follows the same blueprint as the UK Australia deal in lowering tariffs to zero in key agricultural sectors”.
“This opens the door to food produced in ways that harm nature and fuel the climate crisis, undermining the UK’s own transition to more sustainable farming,” she said.
But White stressed that it was still “not too late” for the UK government to remedy the climate and environmental risks posed by both the New Zealand and the Australia deals, as she called for a clearer, greener UK trade strategy.
“The UK government must urgently adopt a set of core standards – including environmental standards – set in UK law, which will allow us to open up trade in the best products from around the world, but ensure we can filter out goods that are produced at high environmental cost and that increase the UK’s global environmental footprint,” she said.
WWF’s concerns echoed those raised by the farming sector. Just last week National Farmers Union (NFU) president Minette Batters delivered a scathing critique of the government’s trade policy, which she described as setting “completely contradictory” environmental standards for British farmers and overseas producers.
And in the wake of yesterday’s announcement of the new trade agreement with New Zealand, Batters said she was “right to be concerned” about the UK’s approach to trade following its controversial agreement with Australia, which like the latest deal eliminates tariffs for imported agricultural products.
“I have consistently pointed out that the real risk to UK farmers, and longer term for people wanting to buy British food, from the government’s approach to trade deals is not the individual deals themselves but the cumulative impact of each deal when added together,” she said.
Environmental groups have voiced similar concerns, fearing the failure to embed demanding environmental standards in the new trade deals with Australia and New Zealand could be replicated in potential upcoming trade negotiations with countries such as Brazil and the US, where the environmental impacts of increased trade could be greater still.
Batters therefore called for an overhaul of the government’s approach to trade, which she warned at present would continue to open the floodgates to cheaper products from abroad that undercut British farmed produce with each new free trade agreement brokered.
“Once again, there appears to be extremely little in this New Zealand trade deal to benefit British farmers,” she added. “UK farm businesses face significantly higher costs of production than farmers in New Zealand, and margins are likely to tighten further in the face of rising input costs, higher energy bills and labour shortages. The government is now asking British farmers to go toe-to-toe with some of the most export-orientated farmers in the world, without the serious, long-term and properly funded investment in UK agriculture that can enable us to do so; the sort of strategic investment in farming and exports that the New Zealand government has made in recent decades.”
While the latest deal with New Zealand appears on paper to offer stronger rhetoric on climate action and the net zero transition, the government’s broad approach of offering up zero-tariff access to the UK market with minimal environmental safeguards looks to be increasingly entrenched, further fuelling concern among environmental groups and farmers. Both have repeatedly called for a consistent, clear trade strategy that embeds the UK’s commitments to higher environmental, food safety and animal welfare standards, and expects the same in return of Britain’s trading partners. Such calls have so far fallen on deaf ears in Whitehall, however, and the ongoing row over post-Brexit trading policy shows no sign of being resolved any time soon.
Want to find out more about how the net zero transition will impact your business? You can now sign up to attend the virtual Net Zero Finance Summit, which will take place live and interactive on Tuesday 29 March and will be available on demand for delegates after the event.