SYDNEY - A free trade agreement between New Zealand and Britain will come into force at the end of this month, New Zealand's government said on Friday.

First signed in March 2022, the agreement will see 99.5% of all New Zealand exports enter Britain duty free through a combination of tariff elimination and duty-free quotas.

New Zealand forecasts the deal with its seventh largest trading partner will add NZ$1 billion to GDP each year and save NZ$37 million in tariffs annually. The UK estimates the deal will add £800 million to its GDP.

“The market access outcomes are among the very best New Zealand has secured in any trade deal,” Prime Minister Chris Hipkins said in a statement.

The deal has its roots in London's post-Brexit pivot away from trade with the European Union. A similar agreement between Australia and Britain received Royal Assent in March and is expected to come into force soon.

“The entry into force of our new trade deal marks a new chapter in the great friendship between our two countries,” British Prime Minister Rishi Sunak said in the same statement.

Duty-free quotas for major New Zealand exports such as dairy and red meat will gradually expand before being fully liberalised in five and 15 years, respectively.

New Zealand exported NZ$455 million worth of beef to the UK in 2022.

Both countries will also upgrade the length of working holiday visas to three years, from two and increase the age of eligibility to 35 years from 30. Just under 16,000 people in total use the scheme in both countries.

(Reporting by Lewis Jackson)