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What Brexit means for New Zealand exporters and what Customs is doing to prepare for Brexit.
The United Kingdom (UK) formally left the European Union (EU) at 11pm GMT on 31 January 2020.
When the British exit from the EU - or Brexit – occured, the UK entered a transition period until 31 December 2020. During this transition period, the UK remains in the EU, including both the European single market and customs union, and the UK will negotiate its future terms of trade and its political and security relationship with the EU.
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?
During the 11 month transition period following the UK’s exit from the EU, the existing conditions of trade access to the UK for third countries, such as New Zealand, continue.
Leaving the EU allows the UK to develop its own new trade agreements with other countries, including New Zealand.
Should the UK and EU not reach agreement on their terms of trade after 31 December 2020, and an extension of the transition period is not agreed, then a "no trade deal" scenario is possible on 1 January 2021.
While the exact implications of a no trade deal scenario on 1 January 2021 are still unknown, Customs is focused on doing its best to help New Zealand’s exporters to the UK during this uncertain time.
What has the NZ Government been doing?
The New Zealand Government has been paying close attention to how Brexit unfolds, to ensure our country’s interests are maintained and advanced. We have been engaged at all levels, with decision-makers in the UK and the EU, particularly on trade and economic matters. New Zealand’s aim has been to ensure we limit disruption as much as possible to those New Zealanders affected by what happens.
The New Zealand Government has been working to protect our current market access to both the EU and the UK, including under the EU’s WTO tariff rate quotas. We have been 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 at the conclusion of the transition period 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 online.
What has Customs been doing?
Customs has also been paying close attention to how Brexit unfolds.
To help facilitate New Zealand trade with the UK during Brexit, we established a specialist Customs Counsellor role at the New Zealand High Commission in London. This experienced New Zealand Customs official is working closely with other New Zealand agencies, the UK Government and our EU-focused Customs Counsellor based in Brussels who is also monitoring Brexit-related trade developments.
We have been 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.
We have also been 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 for Brexit.
On 1 August 2019, New Zealand and the UK signed a customs agreement which rolls over existing trade-related agreements with the EU into the UK-New Zealand 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 New Zealand / UK Customs agreement enters into force on the day that the obligations under the Customs Agreement between the European Community and New Zealand cease to apply to the UK - in practical terms this means at the end of the transition period, on 31 December 2020.
What will happen to the EU-NZ 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. 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. The UK continues to be a party to the agreement until it exits the EU.
As already discussed above, New Zealand and the UK signed a customs agreement in August 2019 which rolls over existing trade-related agreements with the EU into the UK-New Zealand post-Brexit context.
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 (WTO), 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-New Zealand 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 2019 in New Zealand.
Find out more about EU-New Zealand 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 New Zealand business and concerned about the impact on Brexit on your exports to the UK or the EU, email email@example.com.