Perhaps it’s also worth bringing a plate of sausage rolls along too, as when British Prime Minister Rishi Sunak hosted his New Zealand counterpart, Chris Hipkins just before the coronation of King Charles III.
It was announced earlier last week that the delayed implementation of the FTA would be brought forward to the end of this month.
Britain, on leaving the European Union, was casting around for quick, or at least quickish, wins. That incentive prompted it to look favourably on trade deals with Australia and New Zealand.
Australia came first, and then an agreement with New Zealand was signed in principle in October 2021 and signed in February 2022. Both countries had to pass relevant legislation.
The agreement was expected to be ready to apply by the end of last year. While political turmoil in the UK caused delays, a date has now been able to be set for implementation.
Country-to-country trade deals are becoming more important than ever in a world that has been lurching towards increased protectionism and away from global trade consensus.
The agreement with Britain is good, with the immediate removal of tariffs on the likes of wine and honey and some fish. While there is a little disappointment it will take five years for most dairy and 15 years for sheep and beef tariffs to be phased out, the outcome is realistic given British farming lobbies.
New Zealand was described as Britain’s "farm in the Pacific" in the middle of the last century. Then, in 1973, came the "betrayal" when Britain joined Europe and quotas and tariffs decimated this country’s major exports.
Adapting to the change was slow and at times painful as diversification of markets took place.
These days, while we live in a markedly different world, New Zealand also has far too much dependence on trade with one country, China.
While this is widely acknowledged, little has been achieved in lessening the dependence.
The FTA with Britain is not a game changer but is at least helpful. Britain had slipped to becoming New Zealand’s seventh-largest trading partner. Two-way trade was worth $5.3 billion in the year to the end of last December and was not increasing.
The Government says the FTA should drive exports up by 40% (goods exports are at present $1.5 billion a year) and provide $1 billion a year in growth.
There are also gains through improvements in the ease of doing business between the two countries. More common regulations and joint recognition of professional qualifications are sought.
Many residents from both countries will benefit directly from the upgraded holiday and working scheme. Increased age eligibility (from 30 to 35) and longer allowable stays come into force this year.
Although the 2018 Trans Pacific Partnership (CPTPP), even without the United States, was a significant development, further work is needed in other areas.
The obvious hole is India, where Australia has a trade agreement in place but New Zealand has made little progress.
India has recently passed China, by some measures, as the world’s most populous nation. India is vibrant and growing and a counterweight to China’s might.
India is also notoriously protectionist, especially in agriculture. The average agricultural tariff for New Zealand goods is 34.4%. Two-way trade is about $2.5 billion a year, making India New Zealand’s 10th-largest trading partner.
India has comparatively little to gain from an agricultural country like New Zealand, while Australia has attractive minerals to export.
Nevertheless, a recent report from the India-New Zealand Business Council has criticised the lack of high-level and diplomatic attention to India, the lack of flexibility in trade agreement expectations and a failure to build a relationship over many years.
New Zealand has done well with the trade agreement with Britain, these days a second-tier world power, while failing with India, expected to be the world’s third-largest economy within five years.
