The UK has signed a trade deal with New Zealand, removing trade barriers between the two countries.
The deal is the latest agreement signed by the UK since Brexit and will end tariffs on goods between the countries.
The UK already enjoyed relatively low tariffs on exports to New Zealand and those that will now be scrapped include 10 per cent charges on clothing and footwear, 5 per cent on buses and up to 5 per cent on ships, bulldozers and excavators.
The deal’s official strategic outline published by the Department for International Trade in June 2020 said the effect on GDP (gross domestic product) from the deal will be “close to zero”.
But under one modelled scenario government modellers said it would be possible the UK economy could contract by -0.01 per cent because of its effects and the damage competition could do to domestic UK industries like farming.
New modelling released on Monday says that officials now expect the deal to have a positive effect of 0.02 per cent to 0.03 per cent, though they say “estimates are based on certain assumptions about the global economy and the UK-New Zealand trade relationship, and are subject to various forms of uncertainty”.
The new modelling still suggests that farmers and the food processing industry will actually lose out, but says this will be balanced out elsewhere in the economy.