On November 15, 2022, the United Kingdom Free Trade Agreement Legislation Act 2022 received royal assent in New Zealand. The act amends New Zealand law as part of implementing the free trade agreement (FTA) between New Zealand and the United Kingdom (U.K.), which was signed on March 1, 2022 (New Zealand time; February 28, 2022, U.K. time).
The U.K. is also currently in the process of passing the Trade (Australia and New Zealand) Bill to enable the implementation of certain chapters of its trade agreements with Australia and New Zealand. The FTA with Australia, signed in December 2021, was the first “new” trade deal entered into by the U.K. following its withdrawal from the European Union.
The United Kingdom Free Trade Agreement Legislation Act
The explanatory note to the relevant bill stated that “[m]ost of the obligations in the FTA are already met by New Zealand’s existing domestic legal and policy regime. A limited number of legislative and regulatory amendments are required to align New Zealand’s domestic law with certain obligations in the FTA.” The act amends the following New Zealand legislation:
- Copyright Act 1994
- Customs and Excise Regulations 1996
- Tariff Act 1988
- Dairy Industry Restructuring Act 2001
- Overseas Investment Act 2005
- Overseas Investment Regulations 2005
The amendments enable, for example, the application of preferential tariff rates, the implementation of transitional quotas on dairy products exported to the U.K. from New Zealand, an extension of the scope of a performer’s property rights to sound recordings of their performances to include the playing of those recordings in public, an increase in the investment screening threshold for investors from the U.K., and the implementation of New Zealand’s commitments to administer a three-year transitional quota for apple exports.
Notable Provisions within the FTA
The FTA consists of 33 chapters, including chapters on national treatment and market access, tariffs, rules of origin, customs procedures, trade in services and financial services, telecommunications, temporary entry for business persons, investment, digital trade, government procurement, and intellectual property. Among the more notable provisions are those contained in chapters on the environment (chapter 22), trade and gender equality (chapter 25), and economic cooperation with Māori (chapter 26).
Chapter 22 prioritizes the elimination of tariffs on products that are environmentally beneficial: “over 290 environmentally beneficial products have been prioritised for tariff elimination – the largest environment goods list ever agreed in the world for an FTA.” It also “includes provisions towards eliminating environmentally harmful subsidies, such as harmful fossil fuel subsidies, and prohibiting fisheries subsidies which lead to overfishing.” In addition, the FTA is the first bilateral trade agreement signed by New Zealand to include a specific article on climate change, with the parties recognizing the importance of achieving the objectives of the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement, and affirming their commitment to act to reduce greenhouse gas emissions, including their ambition of achieving their respective domestic net zero targets by 2050. (FTA art. 22.6.) The Ministry of Foreign Affairs and Trade stated that the FTA contains the “most far-reaching commitments New Zealand has ever negotiated on trade and environment.”
In chapter 25, the parties “affirm their intention to implement the provisions of this Agreement in a manner that advances women’s economic empowerment and promotes gender equality,” and “acknowledge the key role that gender-responsive policies can play in achieving inclusive economic growth and sustainable development.” (Art. 25.2.) Article 25.3 sets out general commitments, including advancing women’s empowerment across the agreement, promoting the importance of a gender perspective across the trade and investment relationship, and implementing the parties’ respective laws and policies that promote gender equality and improve women’s access to trade and economic opportunities.
Chapter 26 recognizes “the unique relationship that exists between Māori and the United Kingdom, noting that representatives of the British Crown and Māori were the original signatories to Te Tiriti o Waitangi/The Treaty of Waitangi whilst acknowledging that the New Zealand Crown has now succeeded the British Crown and assumed all rights and obligations.” The parties further recognize the treaty as “a foundational document of constitutional importance to New Zealand” and “the challenges that exist for Māori in accessing trade and economic opportunities derived from international trade.” (Art. 26.2.) Article 26.5 lists specific activities aimed at facilitating cooperation with Māori, including “facilitating access to new and existing supply chains” and “undertaking joint roadshows and activities” that promote links between U.K. and Māori-owned small and medium-sized enterprises (SMEs).
Governing Bodies
Chapter 30 of the FTA establishes a Joint Committee composed of senior officials or ministers of the U.K. and New Zealand that is tasked with considering any matters related to the implementation of the agreement. (Arts. 30.1 & 30.2.) It also establishes several subcommittees and working groups under the auspices of the Joint Committee. (Arts. 30.9 & 30.10.) These include an Inclusive Trade Sub-Committee composed of representatives from each party, including Māori representatives from New Zealand. (Art. 30.8.)
Benefits for New Zealand
Before the COVID-19 pandemic, the U.K. was New Zealand’s seventh largest trading partner, with two-way trade valued at NZ$6 billion (about US$3.86 billion) for the year before March 2020. Once it comes into force, the FTA will mean that “99.5% of New Zealand’s current exports will enter the UK duty-free.”
A press release from the New Zealand government stated that the FTA is predicted to increase New Zealand’s GDP by an estimated NZ$700 million to NZ$1 billion (about US$449.88 million to US$642.68 million) and save exporters about NZ$37 million (about US$23.78 million) per year from the elimination of tariffs.
Prepared by Nabila Buhary, Law Library Legal Research Fellow, under the supervision of Kelly Buchanan, Chief, Foreign, Comparative, and International Law Division II
Law Library of Congress, December 29, 2022
Read more Global Legal Monitor articles.