New trade deal with new zealand

[Slam]

Hi,

So UK has agreed a trade deal with new zealand. Possible deals coming with other countries too. 

Says up to 5% off tariff for metal goods. Assuming that does involve bullion? Nothing to write home about but do you think this is paving a way to future better deals with say the US? Especially when everyone looking to go green?

Also is it paving a way for a large bullion dealer to set up shop there and import/export. 

Any thoughts?

[BackyardBullion]

Tariff's are not the same as VAT so it is basically "fluff" for saying trade deal. 

It will benefit larger importers and businesses that bring goods into the UK but for private, non VAT registered individuals and businesses it is next to meaningless. 

This is the same for all potential trade deals in the future. 

"Free Trade" with the EU or US or wherever is a catchy slogan but once again, VAT will be due on all imports that it applies to. 

[ArgentSmith]

32 minutes ago, BackyardBullion said:

This is the same for all potential trade deals in the future. 

Wouldn't it give an unfair advantage to foreign vendors if that wasn't the case?

[BackyardBullion]

6 minutes ago, ArgentSmith said:

Wouldn't it give an unfair advantage to foreign vendors if that wasn't the case?

Yes, there is always a balance to be had with supporting home grown UK businesses for sure. 

[Pete]

Tarriffs fall into two main categories -
(a) Mafia type of protectionism to your own market
(b) barrier to inferior products and dumping.

By way of examples -
(a) You have an industry in the UK that is inefficient, unproductive, dependent on back to back bail outs but still makes car parts.
Alternative parts available from overseas, possibly better quality and certainly cheaper, you apply a tariff e.g. 50%.
The end user pays for either inefficiently produced parts sourced domestically or pays a high tariff for the privilege of buying imports.
The good foreign producer then looses business but either way the consumer picks up the bill.
The UK manufacturer of the finished product cannot compete because his cost of parts is too high on the open market.

(b) A lot of parts perhaps over produced or rusting in a carpark appear cheap on the market from say India.
The UK buyer sees an opportunity to make his bonus by getting very cheap imports, perhaps even below the cost of manufacture.
Without a high tariff these cheap unsustainable imports mean the usual supplier(s) cannot compete and loose orders causing their factory to close.
Also the parts that were supposed to be made of fine silver turn out to be cupronickel plated with silver and the parts that were allegedly tested for imperfections were not tested so corrode and burn out in months rather than decades ....

We hear mostly about the poor UK sheep farmers when it comes to the trade deal with New Zealand.
I don't have any knowledge of sheep farming but I assume sheep roam the fields and hills eating grass then get culled for meat.
How therefore can New Zealand lamb end up being significantly cheaper than UK lamb bearing in mind the additional cost of transportation half way across the world with the added middlemen ?
I could understand a difference if this was labour intensive and we paid our workers much more than theirs.

We also know that cheap labour means we have lots of products manufactured in China and Asia.
How does this tally with high tech and automation with minimal labour ?
We should be producing flat screen TVs in the UK and not South Korea for example.
These are built by robots in factories that don't even need lighting as there are no people working in the factories.

The new commercial aircraft of the future will have one pilot and a dog in the cockpit.
The pilot's job is to feed the dog and the dog is there to bite the pilot if he dare touch any of the controls.
 

[jultorsk]

All I know about sheep is what I learned from Clarkson's Farm - apparently they're not really profitable in comparison to the shepherding effort and numerous ailments requiring vet visits. (He did say though that he loves his sheep, but it really did not seem to make financial sense). In NZ the sheep are humongous and there's a billion of them. Seriously many and seriously big, too - with what all the lovely merino wool they grow. So maybe they just do the numbers game better, considering the sheeploads of mutton they export to China.

Anyway, yes the EU is the type (a) of above I suppose - for example, in Australia we can buy tinned tomatoes from Italy cheaper than similar product from tomatoes grown in Australia. But exporting agricultural goods from Australia to the EU does not make much sense due to EU tariffs. I guess at the end of the day tariffs (=taxes on imports) are just taxes on consumers. 

Nevertheless I think it's a good announcement. It's good that the UK is 1) getting the deals done and closed in the first place and 2) it shows the 'pivot' from EU area to Indo-Pacific where there are significant growth opportunities.

--

A comprehensive trade agreement with New Zealand will cut  red tape for businesses, end tariffs on UK exports and create new opportunities for tech and services companies, while making it easier for UK professionals to live and work in New Zealand.

UK-New Zealand trade was worth £2.3 billion last year and is set to grow under the deal. The deal will remove barriers to trade and deepen access for our advanced tech and services companies, while making it easier for smaller businesses to break into the New Zealand market.

Tariffs as high as 10% will be removed on a huge range of UK goods, from clothing and footwear to buses, ships, bulldozers and excavators, giving British exporters an advantage over international rivals in the New Zealand import market - a market which is expected to grow by around 30% by 2030 . High-quality New Zealand products loved by British consumers, from Sauvignon Blanc wine to Manuka honey and kiwi fruits, could be cheaper to buy. 

UK workers will benefit from  improved  business travel arrangements  and  professionals such as lawyers and architects will be able to work in New Zealand more easily, allowing  UK  companies  to set up shop and  bring the best British talent with them. Both sides have also committed to a mobility dialogue outside the trade agreement that will consider how people-to-people links can be deepened further.

The New Zealand trade deal  follows advanced  free trade agreements  already struck with Australia and Japan and helps pave the way for UK to join Trans-Pacific Partnership (CPTPP), a free trade area of 11 Pacific nations with a GDP of £8.4 trillion in 2020.

https://www.gov.uk/government/news/uk-agrees-historic-trade-deal-with-new-zealand

 

 

[Stu]

I’m surprised NZ didn’t tell the   UK to shove it. There were close trading ties between both before the UK joined the “common market” . Following this NZ was dropped like a stone , trading/ lamb especially was hit big time due to common market tariffs.  

[sovereignsteve]

2 hours ago, Pete said:

We hear mostly about the poor UK sheep farmers when it comes to the trade deal with New Zealand.
I don't have any knowledge of sheep farming but I assume sheep roam the fields and hills eating grass then get culled for meat.
How therefore can New Zealand lamb end up being significantly cheaper than UK lamb bearing in mind the additional cost of transportation half way across the world with the added middlemen ?
I could understand a difference if this was labour intensive and we paid our workers much more than theirs.

 

2 hours ago, jultorsk said:

apparently they're not really profitable in comparison to the shepherding effort and numerous ailments requiring vet visits

The problem is that a vast amount of upland UK land is only suitable for sheep farming. If it wasn't grazed much of it would soon become overgrown and revert to wasteland. Sheep are not very productive, only producing on average 1.75 lambs per ewe. As Clarkson says, the amount of input in labour, veterinary bills, winter feed etc makes sheep farming here a very low profit business.

[sjhdesmond]

2 hours ago, Stu said:

I’m surprised NZ didn’t tell the   UK to shove it. There were close trading ties between both before the UK joined the “common market” . Following this NZ was dropped like a stone , trading/ lamb especially was hit big time due to common market tariffs.  

Jacinda Ardern loves whisky, and now she gets it slightly cheaper.

[Bixley]

1 hour ago, sovereignsteve said:

 

The problem is that a vast amount of upland UK land is only suitable for sheep farming. If it wasn't grazed much of it would soon become overgrown and revert to wasteland. Sheep are not very productive, only producing on average 1.75 lambs per ewe. As Clarkson says, the amount of input in labour, veterinary bills, winter feed etc makes sheep farming here a very low profit business.

That figure of 1.75 lambs per ewe is an overall figure that includes lowland sheep. The figure for upland sheep is much closer to 1 and the lambs take a lot longer to get to slaughter weight than lowland sheep.

[sovereignsteve]

15 minutes ago, Bixley said:

That figure of 1.75 lambs per ewe is an overall figure that includes lowland sheep. The figure for upland sheep is much closer to 1 and the lambs take a lot longer to get to slaughter weight than lowland sheep.

yes correct, thanks.

[Skyfiller]

2 hours ago, sovereignsteve said:

 

The problem is that a vast amount of upland UK land is only suitable for sheep farming. If it wasn't grazed much of it would soon become overgrown and revert to wasteland. Sheep are not very productive, only producing on average 1.75 lambs per ewe. As Clarkson says, the amount of input in labour, veterinary bills, winter feed etc makes sheep farming here a very low profit business.

Horrible, smelly things that just want to cost you money or die anyway they possibly can.

The only thing I took away from farming sheep is don't!

[CANV]

There is no reason why we can’t import all our ‘sheep’ requirements from New Zealand. And just pay upland landowners to graze sheep, should we want to keep that kind of countryside .  It would probably work out cheaper .

Re food security NZ would be a trusted trading partner, it’s not like we are dealing with the French here !

as mentioned earlier the uk did drop both NZ and AUS right in it when we joined the eec   NZ went full free market and now are a food exporting power house.  Making the most of their competitive advantage .

just like the UK which is effectively made of coal, has centuries of cheap frackable gas and loads of oil just offshore, the power stations are built on top of the supply and being a small island the transmission costs are minimal , we are also world leaders in nuclear technology so if there is a power crisis we can have cheap plentiful supplies to ensure consumers have plenty of spare cash and our heavy industries can undercut the rest of the developed world ..

 

oh hang on 

[Cornishfarmer]

1 hour ago, CANV said:

There is no reason why we can’t import all our ‘sheep’ requirements from New Zealand. And just pay upland landowners to graze sheep, should we want to keep that kind of countryside .  It would probably work out cheaper .

Most NZ and oz lamb is going to China at the moment.    Oz currently at record prices be could import more meat but at the current time it’s cheaper to sell British lamb.   What’s coming in is sold as a loss leader to try and keep a lid on the British prices.

get ready for food prices to explode next year.  Boris is sleep walking into another disaster with food price inflation 

[CANV]

I don't think they care. meat is evil to nut nuts and co..  as long as we still have Brussel sprouts and turnips they will be happy.