The draft deal, which follows 16 months of negotiations, is the latest to be brokered by the United Kingdom after its departure from the European Union.
“This is a great trade deal for the United Kingdom, cementing our long friendship with New Zealand and furthering our ties with the Indo-Pacific,” Prime Minister Boris Johnson said in a statement.
Trade between the United Kingdom and New Zealand was worth £2.3 billion ($3.2 billion) in 2020, accounting for less than 0.2% of total UK trade. The deal is not expected to increase UK GDP, according to the UK government’s own estimates.
The rush to sign new trade deals comes as Britain seeks to compensate for losing the economic benefits of EU membership. The European Union accounted for 42% of UK exports of goods and services and 50% of imports in 2020, and companies face new barriers to trade following Brexit.
Britain has also struck deals with Japan and Norway, but they were based on existing agreements negotiated by the European Union.
Johnson said that New Zealand products loved by British consumers will be available for cheaper, from Sauvignon Blanc wine to Manuka honey and kiwi fruit.
New Zealand Prime Minister Jacinda Ardern described the countries as “great friends and close partners.”
“The historical connections that bind us run deep,” she said, adding that the trade deal is “good for our economies, our businesses and our people.”