Preparing for post-Brexit changes
Changes related to the UK’s departure from the EU’s customs union and single market will apply from January 1, 2021.
The United Kingdom (UK) legally left the European Union (EU) on 31 January 2020, but remains in the EU’s customs union and single market until an agreed transition period ends on 31 December. Until that date the UK remains subject to EU rules and regulations.
After 31 December 2020, changes will impact New Zealand businesses trading with the UK, or trading between the UK and EU.
In the absence of a concluded Free Trade Agreement (FTA), trade between the UK and EU will be on non-preferential terms. This means that tariffs will apply where there currently are none. If this happens, the rate applied would be what is contained in the UK and EU’s Most Favoured Nation (MFN) tariff schedules.
If the UK and EU do reach a trade agreement, then trade between them will depend on the tariff preferences and rules negotiated. However, whether an FTA is agreed or not, the rules that govern UK-EU trade will change at the conclusion of the transition period.
What does this mean for NZ exporters?
We encourage businesses to make plans for a range of scenarios to minimise the effects of any disruption. This includes the possibility that a trade agreement is not reached between the UK and the EU by the end of 2020.
Because New Zealand does not currently have FTAs with either the UK or EU, for the most part, trade from New Zealand to the UK or to the EU should continue as it does now. There may be some exceptions to this, including the application of a new UK MFN tariff schedule – so engage with your importing agent as early as possible to identify if and how you might be affected.
To help ensure continuity and stability in the arrangements underpinning our trade, New Zealand and the UK have signed the following bilateral agreements:
Sanitary Measures Applicable to Trade in Live Animals and Animal Products (the Veterinary Agreement)
Mutual Recognition in Relation to Conformity Assessment (the Mutual Recognition Agreement)
Customs Agreement for Mutual Assistance on Administrative Matters.
These agreements are intended to come into effect at the conclusion of the transition period. They will ensure continuation of arrangements New Zealand currently has in place with the UK as a result of similar agreements concluded earlier between New Zealand and the EU. (Read a statement containing more detail on the Veterinary Agreement and Mutual Recognition Agreement.)
We also have continuity arrangements in place for:
exports of New Zealand organic products
conformity checks for the inspection of fresh fruit and vegetables prior to export (in New Zealand’s case, specifically apples, pears and kiwifruit)
fisheries catch certification.