Parliamentary Committees and Public Enquiries
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Impact of UK-New Zealand FTA likely to be positive, if limited, says Lords committee

The economic benefits of the UK-New Zealand free trade agreement (FTA) are likely to be positive if limited, according to the International Agreements Committee.

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The report

In its report on the FTA, published recently (04 November 2022), the committee scrutinises various aspects of the agreement, as well as the Government’s engagement with the devolved administrations and Parliament.  

It welcomes the commitments on climate and environmental protection, the inclusion of a procurement chapter, the dedicated chapters on SMEs and consumer protection, and the provisions facilitating services trade and investment—including those in relation to legal services, financial services and digital trade. 

The committee concludes that a published trade policy is still missing and has called on the Government to publish one to show how this FTA, and others, link into broader foreign policy, security, defence, labour, human rights and environmental objectives. 

After a similar approach was followed for the Australia FTA, the committee says Government has chosen to prioritise tariff liberalisation over retaining some protections for UK farmers. This may lead to greater choice and lower food prices for consumers, but UK farmers could face increased competition as a result, with the devolved nations likely to be disproportionately affected due to the importance of agriculture in Scotland, Wales and Northern Ireland.  

The committee expressed regret that the Government was unable to secure the protection of UK Geographical Indications (GI), which can be important for producers. Whilst the agreement with New Zealand allows for the opening of consultations if New Zealand extends GI protections to others and this now means, as New Zealand has extended protections to EU GIs, the UK Government can initiate such a process, The committee comments that the UK should not have to rely on the EU to secure protections for UK GIs.  

The committee welcomes the improved engagement with the devolved administrations, but notes that it remains to be seen whether the Government’s recent offer to increase the scope of information-sharing will address the concerns of the devolved administrations over areas of reserved competence.  

Chair's comments 

Baroness Hayter, Chair of the International Agreements Committee recently said:

“We welcome the constructive engagement we have had with Department for International Trade officials and Ministers throughout the UK-New Zealand FTA negotiations. However, as with the Australia FTA, we were only able to scrutinise this agreement after all decisions had already been taken.  

“It is important that consultation and dialogue with our committee starts before a mandate is established, so the final mandate can be informed by Parliament. We therefore welcome the recent offer of greater committee involvement during the mandate-setting stage and look forward to discussing the practical details with the new Trade Secretary and her officials. 

“We reiterate our recommendation that the Government should publish a comprehensive trade policy, so that it can be understood in relation to other priorities and also enable us to assess the impacts and trade-offs. 

“For future negotiations, the Government should take full account of the potential cumulative effects of all FTAs on the UK agricultural sector and the potential need to make exceptions to full liberalisation. Monitoring of the actual impacts of FTAs signed to date will be essential. 

“Lastly, we call on the Government to build on recent improvements and ensure that consultation with the devolved administrations and legislatures continues to be transparent, detailed and timely, and that their views are represented throughout the negotiations, including on reserved matters that may have an impact on them.” 

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