The recently announced trade deal in principle between the UK and New Zealand might help insurance brands based in Scotland. The details of the agreement are quite specific, almost like a micro-managed shopping list of goods and services. The press release issued by Gov.UK contains the following quote from NZ PM Jacinda Ardern;
“The United Kingdom and New Zealand are great friends and close partners. The historical connections that bind us run deep. This world-leading free trade agreement lays the foundations for even stronger connections as both countries embark on a new phase in our relationship. It is good for our economies, our businesses and our people.
The deal will provide benefits for people and businesses across the UK:
- Edinburgh’s financial and insurance services companies will benefit from greater access to New Zealand’s market and easier digital trade and business travel.
- Welsh auto companies that exported £3.4m of road vehicles to New Zealand last year will now benefit from the removal of tariffs of up to 10%, while manufacturing companies like Zip-Clip and K-form will also see the removal of tariffs up to 5% on metal goods and construction products.
Interestingly, despite both Boris Johnson and Jacinda Ardern constantly banging the climate change drum, the deal will see an increase in food and drink trade between the two countries, which are approximately 11,426 miles apart. Somehow the “consume local produce and wine to save the planet” message got lost in translation. Zoom calls eh?
It’s worth noting that the new deal offers professionals in finance or law to get into NZ or the UK a bit easier, essentially on a temporary work Visa type of scheme, with joint recognition on qualifications being agreed too.
THE DETAILS ON FINANCIAL SERVICES
IE eventually found some extra details on the financial services aspects of the trade deal buried in the GOV website, which are;
The financial services chapter will include:
- Market access that builds on the already high-quality access both countries have committed to at the WTO. This will be achieved in three ways:
- A negative list of commitments in respect to financial services provided through a commercial presence in each other’s territories.
- Comprehensive commitments in respect to the supply of financial services in the territory of one country to a person of the other country (mode 2 service supply).
- A finite list of cross-border market access commitments for mode 1 service supply that go beyond the UK and New Zealand’s WTO commitments in respect to insurance of large risks and portfolio management services.
- Commitments to promote sustainable finance and diversity in finance through the sharing and promotion of best practice and cooperation in international fora on these issues.
- A commitment to facilitate the transfer of data internationally, subject to exceptions where they are needed to protect privacy, protection of personal data, or are required for prudential reasons.
- A commitment to prohibit unjustifiable localisation of financial data. This will be subject to exceptions, including in relation to requirements relating to legitimate public policy purposes, protection of personal data, confidentiality requirements, and other safeguards included in the chapter.
- Commitments to high standards of transparency that reflect those in the domestic regulation chapter but ensure the rules are tailored to meet the specific needs of financial regulators.
- A commitment recognising the importance of allowing financial service suppliers to offshore their back-office functions in certain circumstances, and to avoid the imposition of arbitrary requirements on the performance of those functions.
- A commitment to allow the provision of new financial services in situations where these are permitted domestically.
- An FTA-wide exception that preserves both countries’ rights to regulate for prudential reasons, including to ensure the stability and integrity of the financial system.
Despite trawling through all the paperwork, IE could not see any details on why Scottish insurance brands would benefit in a particular way, compared to those based elsewhere in the UK. So Ardern’s quote is slightly baffling – maybe she has a separate deal with Sturgeon?