The Sun newspaper recently published a story headlined: Kiwi Go! Britain close to securing huge free trade deal with NZ – bringing cheaper wine and meat.
It claimed rapid progress in the talks and said negotiators had agreed the text of an outline agreement to slash tariffs on NZ produce entering the UK, including Marlborough wine, lamb and beef.
The article follows a similar one in January predicting the talks would all be wrapped up by Easter.
But the tabloid’s most recent report was so wide off the mark that NZ officials are said to have immediately smelled a rat.
A highly-placed source says the UK’s most recent offer on access for NZ agricultural exports ahead of the start of the fourth round of negotiations on Monday had once again fallen well short of what NZ officials could accept – something British negotiators would be well aware of.
The source says the suspicion in Wellington was the story was planted by the British to pressure the Australians to accept the offer currently on the table in their own trade negotiations with the UK.
“They are playing games with Australia and NZ … that we will somehow be pressured into dropping our fundamental positions and accepting their rubbish deals for the sake of a deal ahead of the other,” they said.
The source says the timing of the latest article had added to those suspicions.
“The Australian trade minister is due in London in 13 days’ time and they are wanting to put pressure on him,” they claimed.
Who is first to clinch a UK FTA is more than a matter of Trans-Tasman pride and could have serious consequences for exporters in both countries.
The importance of being first to the finish line in trade negotiations was amply displayed when Australia pipped NZ at the post for a free trade agreement with South Korea in 2014.
Australian beef exporters gained a significant immediate tariff advantage over NZ rivals who have been catching up ever since despite clinching a trade deal just a year later.
By virtue of their 12-month head start, Australian beef retains a 2.7% tariff advantage over its NZ competition till 2030 when the gap closes and tariffs are scrapped entirely under the South Korea-NZ FTA.
While NZ has lost market share in the South Korean beef market, the scenario is different in the UK where Antipodean dairy and beef exports have for decades been largely shut out of its consumer market by high tariffs designed in Brussels.
Australian and NZ exporters will be eager for the first-mover advantage in establishing themselves in the rich UK market now that it is out of the European Union.
In the meantime, NZ trade negotiators are holding the line.
A Ministry of Foreign Affairs and Trade spokesperson confirmed the ministry was aware of UK press reports of an imminent deal with NZ.
“NZ and the UK have a shared ambition to swiftly conclude a world-leading free trade agreement,” they said.
“But the desire to move at pace doesn’t outweigh our joint commitment to negotiate a comprehensive agreement that removes all tariffs.
“There is still work to do to fully reflect that commitment.”
