What Brexit means for New Zealand exporters and what is Customs doing to prepare for Brexit.
The United Kingdom (UK) is scheduled to formally leave the European Union (EU) on 29 March 2019. The British exit - or Brexit - will have a range of implications for New Zealand and New Zealanders.
The nature and extent of its impacts will be determined by the terms under which the UK exits.
This page will be updated as further information is received. The following information is not intended to be, nor should it be relied upon by New Zealand businesses, as a substitute for legal or other professional advice.
What does Brexit mean for New Zealand?
The terms of the UK's exit are yet to be confirmed, so several scenarios are possible.
The provisional exit agreement reached between the UK and EU includes a transition period until the end of 2020. During that time existing conditions of trade access for third countries, such as New Zealand, would continue and the UK and EU would negotiate the terms of their future relationship.
If an exit agreement is not agreed between the UK and EU, there would be no transition period – this is known as a 'no-deal' Brexit.
What is the New Zealand Government doing?
The New Zealand Government is paying close attention to how Brexit unfolds, to ensure our country’s interests are maintained and advanced. We are engaged at all levels, with decision-makers in the UK and the EU, particularly on trade and economic matters. New Zealand’s aim is to ensure we limit disruption as much as possible to those New Zealanders affected by what happens.
The New Zealand Government is planning for a range of scenarios, including the possibility of a no-deal Brexit. We are working to protect our current market access to both the EU and the UK, including under the EU’s WTO tariff rate quotas. We are engaging regularly with decision-makers in the UK and EU to stress the importance of arriving at an outcome that leaves us no worse off.
To help ensure continuity and stability in the arrangements underpinning our trade, New Zealand and the UK have signed bilateral agreements on Sanitary Measures Applicable to Trade in Live Animals and Animal Products (the Veterinary Agreement) and on Mutual Recognition in Relation to Conformity Assessment (the Mutual Recognition Agreement). These agreements are intended to come into effect either as soon as the UK leaves the EU (in the event of a ‘no deal’ Brexit) or at the conclusion of any transition period that might be agreed between the UK and the EU. They will ensure continuation of arrangements currently in place with the UK by virtue of similar agreements concluded earlier between New Zealand and the EU. A statement containing more detail on these agreements is available here.
What is New Zealand Customs doing?
New Zealand Customs is also paying close attention to how Brexit unfolds.
To prepare we have established a specialist Customs Counsellor role at the New Zealand High Commission in London. This experienced New Zealand Customs official is working closely with the United Kingdom Government and our EU-focused Customs Counsellor based in Brussels, to help facilitate New Zealand trade with the UK during Brexit.
Customs is working closely with New Zealand Trade and Enterprise (NZTE), the Ministry for Primary Industries (MPI) and the Ministry of Foreign Affairs and Trade, to ensure we have a coordinated approach to communicating to and engaging with New Zealand exporters on Brexit.
Customs is also working with HM Revenue and Customs and UK Border Force to ensure systems, processes and arrangements are in place to limit disruption as much as possible to New Zealand exporters affected by Brexit.
What does Brexit mean for New Zealand businesses?
Brexit is likely to affect New Zealand businesses that export goods to the UK. It is unlikely to affect New Zealand businesses that import goods from the UK.
As the deadline for agreeing the nature of the post-Brexit relationship fast approaches, our government is encouraging potentially affected New Zealand businesses to put in place contingency plans for what might happen, including the possibility that no deal is reached between the UK and the EU. These plans will help to minimise any disruption to trade and travel.
There will be no change to the rules covering New Zealand’s trade and investment, or people-to-people links with the UK and EU, while the UK remains a member of the EU. Agreement on a transition period as part of the UK’s withdrawal would limit any sudden changes.
Customs understands that:
- while the UK and EU border agencies are preparing for a no deal Brexit, no major changes are expected to Customs documents
- importers have options to reduce congestion – eg duty deferral
- the UK is set to remain in the Common Transit Convention (CTC) after Brexit, ensuring simplified cross-border trade for UK businesses exporting their goods
- the impact may differ for sea container, cross channel roll on/roll off, air cargo
- the impact may differ by Port.
Customs will continue to work with HM Revenue and Customs and UK Border Force, as well as the European Commission and EU countries, to get clarity on the impact of Brexit on New Zealand businesses.
How to prepare for Brexit
Both the UK and EU have issued advice about how to prepare if the UK leaves the EU with no deal. The UK Government has issued technical notes to help businesses and individuals understand the implications for them of a ‘no deal’ scenario. These technical notes cover a range of topics, including:
- importing and exporting
- product labelling and product safety
- travelling between the UK and the EU
- regulation of medicines and medical equipment
- workplace rights
- applying for EU-funded programmes
- civil nuclear and nuclear research
- state aid.
View the UK government technical notes and partnership pack which provide guidance and help businesses prepare for Brexit if there is 'no-deal'. The EU Commission and EU Member States have also published Preparedness Notices which identify the consequences of a UK withdrawal without an agreement.
New Zealand businesses should review the guidance on importing to and exporting from the UK and the EU under a 'no deal' scenario. Individuals should consider how a 'no deal' scenario could affect them with their residency, education and employment.
To help prepare for Brexit, New Zealand businesses should also:
- ensure they check the tariff rate for their goods into the UK and EU eg. look at the UK’s online tariff finder
- ensure they understand any documentation requirements for importing into the UK and EU – checking with their customer and forwarder
- check with their forwarder on shipping routes and understand any transit or trans-shipment requirements
- check if their customer or forwarder is an Authorised Economic Operator (AEO) – especially for EU trade
- if there is a delay – get facts and be clear why a delay has occurred
- keep an eye on delays or impacts at particular ports
- keep informed by regularly checking the New Zealand government websites.
Customs has also prepared some questions and answers to help New Zealand businesses prepare for Brexit – these will be updated as further information is received.
The New Zealand Trade and Enterprise website has more useful information about Brexit for New Zealand businesses:
The Ministry for Primary Industries' website also has useful information for businesses about preparing for Brexit, including a possible 'no-deal' scenario.
Both businesses and individuals should follow public developments on Brexit. They should also consider seeking legal advice and/or engaging a migration agent, customs broker, freight forwarder or logistics provider to help support and prepare them for Brexit, including a 'no deal' scenario.
What will happen to the EU-New Zealand Customs agreement? Will there be a UK-New Zealand Customs agreement?
New Zealand has a Customs agreement with the EU which supports our risk management approach to facilitating trade while maintaining border security. The agreement covers cooperation in customs procedures, supply chain security and risk management, mutual administrative assistance, information exchanges, and the exchange of personnel. A feature of our customs agreement with the EU is the establishment of a Joint Customs Cooperation Committee. The Customs agreement is also a necessary first step towards agreeing a mutually recognised secure trade scheme between New Zealand and the EU. The EU–New Zealand Customs agreement is not affected by Brexit.
As a result of Brexit, Customs is considering the benefits of New Zealand negotiating a customs agreement with the UK.
What will happen to trade between NZ and the UK? What about NZ trade with the rest of the EU?
New Zealand hopes to conclude a bilateral Free Trade Agreement (FTA) as early as possible once the UK is in a position to do so. The UK Government identified New Zealand as a priority for FTA negotiations following its departure from the EU.
In the meantime, the same rules will apply to our trade with both the UK and the EU until the UK formally departs the EU.
These include the range of areas incorporated in the EU’s commitments under the World Trade Organization, which cover the UK. These WTO commitments include Tariff Rate Quotas that provide access for important New Zealand exports, such as certain meat and dairy products.
In July, the UK and EU notified WTO Members of their proposal to split the EU's current WTO bound tariff rate quotas post Brexit. New Zealand and other quota holders have made clear that this approach would not be acceptable, as it would reduce exporters’ current access by removing their flexibility to respond to changes in market demand between the UK and the EU27 markets.
What will happen to the EU-NZ free trade agreement?
Negotiations towards an EU-NZ free trade agreement will continue without the UK after it leaves the EU. New Zealand launched these negotiations in June 2018 and negotiators met for a second round in October in New Zealand.
Find out more about EU-NZ free trade agreement negotiations.
For more information
Additional information on Brexit can be found on the following New Zealand Government websites:
- New Zealand Trade and Enterprise
- Ministry of Foreign Affairs and Trade
- Ministry for Primary Industries
You should also keep up to date with the latest Brexit information on these international websites:
If you wish to contact Customs in relation to Brexit, including if you are a New Zealand business and concerned about the impact on Brexit on your exports to the UK or the EU:
- call 0508 BREXIT or 0508 273 948 (toll free)