Ministers sealed what is only the second bespoke Brexit trade deal after agreeing terms with New Zealand that will allow cheaper wine imports but open British farmers up to competition.
Under the terms of the agreement tariffs will be waived on a range of New Zealand imports, potentially reducing the price of Sauvignon Blanc by 20p and reducing taxes on products such as Manuka honey and kiwi fruit.
The UK will also agree to phase out quotas on New Zealand lamb, beef and dairy exports.
Ministers claimed that, like the Australian trade deal, this would not pose a threat to domestic producers as both countries prioritise agricultural exports to China and the Far East.
However, farmers’ leaders warned that if China restricted imports this could lead to the UK being inundated with meat produced at a lower cost than was possible in Britain because of enhanced animal welfare standards.
“The fact is that UK farm businesses face significantly higher costs of production than farmers in New Zealand and Australia,” Minette Batters, president of the National Farmers’ Union, said. “The government is now asking British farmers to go toe-to-toe with some of the most export-orientated farmers in the world, without the serious, long-term and properly funded investment in UK agriculture that can enable us to do so.
“We should all be worried that there could be a huge downside to these deals, especially for sectors such as dairy, red meat and horticulture.”
Ministers insist that the deal has safeguards in it to prevent a huge influx of agricultural imports but the NFU said in practice these were hard to trigger and would result in retaliatory tariffs.
The deal was agreed after a video call yesterday between Boris Johnson and Jacinda Ardern, New Zealand’s prime minister, after 16 months of talks involving Department for International Trade negotiators.
Due to New Zealand’s strict entry restrictions, most of the negotiations were conducted online apart from those with New Zealand’s chief negotiator, who doubles up as the country’s ambassador to Ireland.
The Department for International Trade said the agreement would remove tariffs on UK exports from clothing and footwear to buses, ships and bulldozers.
They added that UK workers would benefit from improved business travel arrangements, and professionals such as lawyers and architects would be able to work in New Zealand more easily.
The department declined to put a figure on how much the deal would increase trade between the two countries or predict its impact on economic growth. However, a previous government analysis suggested that at best it would increase GDP by only 0.01 per cent, and could even result in the economy contracting by that amount.
Johnson hailed the deal as “cementing our long friendship with New Zealand and furthering our ties with the Indo-Pacific”.
He said: “It will benefit businesses and consumers across the country, cutting costs for exporters and opening up access for our workers.”
Lord Bilimoria, president of the CBI, said it would help the UK’s chances of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade pact including Australia, New Zealand and Japan.
But Emily Thornberry, the shadow trade secretary, claimed that the agreement “fails on every count” and was a deal “whose only major winners are the mega-corporations who run New Zealand’s meat and dairy farms, all at the expense of British farmers”.