What Brexit means for New Zealand exporters and what Customs is doing to prepare for Brexit.
The United Kingdom (UK) had been scheduled to formally leave the European Union (EU) on 29 March 2019 - this departure date was subsequently changed to 31 October 2019.
However, the European Council has since agreed to extend the UK's departure date to 31 January 2020, with the option of the UK leaving the EU before that date if the UK Parliament approves the negotiated Withdrawal Agreement.
The British exit - or Brexit - will have a range of implications for New Zealand (NZ) and New Zealanders. The nature and extent of its impacts will be determined by the terms under which the UK exits the EU.
NZ businesses that may be affected by Brexit are encouraged to consider the implications of the full range of Brexit scenarios, including a no deal Brexit occurring on 31 January 2020. A no deal Brexit would occur if the UK and EU cannot agree on the terms of exit, and there is no transition period.
While the exact implications of Brexit are still unknown, Customs is focused on doing its best to help NZ’s exporters to the UK during this uncertain time.
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 NZ 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 proposed Withdrawal Agreement negotiated between the UK and EU includes a transition period. During that time existing conditions of trade access for third countries, such as NZ, would continue and the UK and EU would negotiate the terms of their future relationship.
If the Withdrawal Agreement is not ratified by the UK and EU, and no alternative exit arrangement is agreed, the UK would automatically exit the EU on 31 January 2020 without any transition period – this is known as a no deal Brexit.
What is the NZ Government doing?
The NZ 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. NZ’s aim is to ensure we limit disruption as much as possible to those New Zealanders affected by what happens.
The NZ 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, NZ 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 NZ and the EU. A statement containing more detail on these agreements is available to download.
What is Customs doing?
Customs is also paying close attention to how Brexit unfolds.
To help facilitate NZ trade with the UK during Brexit, we have established a specialist Customs Counsellor role at the New Zealand High Commission in London. This experienced NZ Customs official is working closely with other NZ agencies, the UK Government and our EU-focused Customs Counsellor based in Brussels.
We are 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 NZ exporters on Brexit.
We are also working with HM Revenue and Customs, UK Border Force, the European Commission and EU countries, to understand what Customs systems, processes and arrangements are in place to limit any disruption, as much as possible, to our exporters.
On 1 August 2019, NZ and the UK signed a customs agreement which rolls over existing trade-related agreements with the EU into the UK-NZ post-Brexit context. It formalises and further strengthens the cooperative working relationship that exists between New Zealand Customs Service and Her Majesty’s Revenue and Customs, and:
- provides a basis on which we can potentially assist in the resolution of any border issues experienced by exporters
- facilitates cooperation in supply chain security
- is an important first-step in the process to getting a mutual recognition agreement (MRA) on Customs matters between our two countries.
The NZ / UK Customs agreement will enter into force on the day that the obligations under the Customs Agreement between the European Community and NZ cease to apply to the UK – when the UK leaves the EU.
What does Brexit mean for NZ businesses?
Brexit may affect NZ businesses that export goods to the UK. It is unlikely to affect NZ 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 NZ 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 NZ’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.
We understand that:
- while the UK and EU border agencies are preparing for a no deal Brexit, no major changes are expected to customs documents for NZ exports going direct into the UK or EU
- the UK has recently announced simplified transitional arrangements for a no deal scenario to help reduce congestion at UK ports, including duty deferral
- the UK is set to remain in the Common Transit Convention (CTC) after Brexit, ensuring simplified cross-border trade for UK businesses trading with the EU
- the impact of Brexit may differ for sea container, cross channel roll on/roll off, air cargo
- the impact may also differ by port.
We 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 NZ 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's technical notes and online tool which provide guidance and help businesses prepare for Brexit if there is no deal. The European Commission and EU Member States have also published Preparedness Notices which identify the consequences of a UK withdrawal without an agreement. The European Commission has also published a Customs guide for businesses, to help them prepare for Brexit.
NZ 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, NZ 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 NZ government websites.
NZTE's website has more useful information about Brexit for NZ businesses:
MPI's website also has useful information for businesses about preparing for Brexit, including a possible no deal scenario.
Treasury’s website also has useful information for businesses on how to help manage uncertainties, including managing payment terms for exported goods.
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-NZ Customs agreement? Will there be a UK-NZ Customs agreement?
NZ 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. The Customs agreement is also a necessary first step towards agreeing a mutually recognised secure trade scheme between NZ and the EU. The EU–NZ Customs agreement is not affected by Brexit. The UK continues to be a party to the agreement until it exits the EU.
As already discussed above, NZ and the UK signed a customs agreement in August 2019 which rolls over existing trade-related agreements with the EU into the UK-NZ post-Brexit context.
What will happen to trade between NZ and the UK? What about NZ trade with the rest of the EU?
NZ 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 NZ 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 (WTO), which cover the UK. These WTO commitments include Tariff Rate Quotas that provide access for important NZ 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. NZ 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. NZ launched these negotiations in June 2018 and negotiators met for a second round in October in NZ.
Find out more about EU-NZ free trade agreement negotiations.
For more information
Additional information on Brexit can be found on the following websites:
- New Zealand Trade and Enterprise
- Ministry of Foreign Affairs and Trade
- Ministry for Primary Industries
- The Treasury
You should also keep up to date with the latest Brexit information on these international websites:
If you wish to contact us in relation to Brexit, including if you are a NZ 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) or +64 508 273 948 (from overseas)