New Zealand's making "steady progress" on a free trade agreement (FTA) with the United Kingdom, but won't compromise on quality amid reports a deal is "just weeks away".
The third round of FTA negotiations between Aotearoa and the UK began on Tuesday with officials looking to "substantively progress and in some areas conclude" discussions. Talks formally launched back in June following Britain's exit from the European Union the January prior.
According to Britain's The Sun, a deal between the countries "is just weeks away", with an anonymous source saying that while an agreement isn't yet completed, there's hope "to get a deal over the line within the next few months, and maybe sooner if things go well".
"There's no deadline, and we'll only do a deal that works for all of Britain, but the ambition is to get it done for Easter".
The UK's Secretary of State for International Trade, Liz Truss, also told the media outlet that "great progress" has been made and that New Zealand is a "vital ally that shares in our belief in free enterprise, democracy and the importance of being tough on countries that don't play fair".
"An agreement would be another important step towards joining the Trans-Pacific Partnership, one of the world's biggest free trade areas, spanning 11 Pacific nations from Canada to Japan."
Truss shared The Sun's article on her Twitter account as well as a tweet from the Department of International Trade marking the start of the third round of negotiations.
New Zealand's Ministry of Foreign Affairs and Trade told Newshub that "steady progress" is being made and during this round negotiators will also look to "agree to timeframes for key deliverables, including all market access offers".
The ministry, however, tempered expectations that a deal may be made in the coming weeks.
"Launching and concluding a new free trade agreement in under a year would be a remarkable achievement. While we wish to reach a future-focussed and inclusive agreement with the UK quickly, we will not compromise the quality of a deal," a spokesperson said.
"To conclude an agreement we need to see New Zealand's trade and economic interests adequately addressed."
When announcing the start of the first round of negotiations, then-Trade Minister David Parker said New Zealand wanted to see tariffs removed, streamlined customs processes, the development of new ways of fostering digital trade and new approaches to address non-tariff barriers.
Among the proposed UK tariffs on key New Zealand exports from 2021 are 8 percent tariffs on onions and kiwifruit and 16 percent tariffs on honey.
"We look forward to an FTA that opens up more opportunities for small and medium sized businesses, Māori exporters, and our regional communities, consistent with our Trade for All objectives," Parker said.
"New Zealand and the United Kingdom have a close relationship, including strong trade and economic ties, common values and traditions and a shared history. A free trade agreement will be an important new milestone in that relationship."
The United Kingdom is New Zealand's sixth-largest trading partner, with two-way trade worth nearly $6 billion in 2019. Our main exports to the UK include meat, fruit, eggs, honey, wool and wine, while our main imports are vehicles, parts, machinery, equipment, and pharmaceuticals.
The Sun article says it's hoped wine imports into the UK will be cheaper while more gin will be sent to New Zealand.
"The deal has flown a little under the radar, but it's an important one and potentially really valuable," the source said.
The UK's formal strategic approach document says that the estimated impact on GDP of having agreement with New Zealand is "close to zero", which "is not particularly surprising given the size of the two economies". However, it said an FTA would be a good step in "using our new-found status as an independent trading nation to strengthen ties with old allies beyond Europe."
"An ambitious, wide-ranging FTA with an old friend like New Zealand is a powerful way for us to do that and make good on the promise of Brexit. There are few countries with which we could negotiate as advanced an FTA as we can with New Zealand in the areas that matter to the UK."