UKIP leader Nigel Farage today apologised for Britain turning its back on New Zealand when it joined the Common Market.

In an exclusive interview with Newstalk ZB's Mike Hosking, Mr Farage said he was sorry for the way Britain treated New Zealand producers who had enjoyed a good trading relationship before the British Government aligned with European trade blocs.

Now Brexit gave an opportunity to strengthen traditional trade ties Downunder, he said.

Mr Farage, who pressured the UK Government to hold a referendum on EU membership and was a leading figure in the Leave campaign, said: "What is even more exciting for me is what we can do with you guys. And I apologise to everybody in New Zealand for what my parents' generation did - we turned our backs on you."


He said it was time to negotiate good trade deals and return to how the two nations previously operated. "We had good preferential trading terms as some of the closest friends and countries in the world. We joined the Common Market as it was then called and dealt you a very bad hand.

"Well now we can talk to you guys about having a sensible, better trading relationship and Britain once again has the chance to be a global trading nation, not just a European one."

Asked about Mr Farage's apology, Prime Minister John Key said the Government had no desire to "relitigate" past issues.

"Britain decided to take the steps that it took. It believed that its future was better placed in Europe, it's now decided it wants to reverse that decision in part.

"But I don't think it's fundamentally going to change what is the United Kingdom being fairly heavily integrated into Europe."

Hear Mike Hosking's interview with Nigel Farage here:

Credit rating cut

Mr Farage, who came under fire during the campaign for targeting immigrants, said exiting the European Union would not harm Britain as a trading nation but would improve it. However, world shares sank further overnight, along with the British pound, as investors repositioned themselves amid deepening uncertainty related to the UK's choice to leave the European Union.

Europe's bank stocks plummeted for another day, and relief might not be in sight. Barclays shares plunged 17 per cent, and those of Royal Bank of Scotland sank 15 per cent.

Standard & Poor's has also downgraded the UK's credit rating, cutting its AAA-rating by two notches to AA.

Britain was the union's largest trading partner and countries relied on their continued business to keep economies afloat.

Up until the 1960s Britain not only consumed most of New Zealand's meat and dairy exports but arranged trade deals with countries outside the Commonwealth.
However, when Britain became part of the European Economic Community in 1973, the level of exports dived as access to the European market was limited by tariffs and quotas.

It took 20 years to begin to recover as New Zealand changed tack and started selling value-added meat to Europe, particularly to the French, German and Belgium luxury markets. At the start of the new century, the European Union was one of two key export markets for New Zealand meat.

Chance to piggy back

Prime Minister John Key has already spoken to Australian Prime Minister Malcolm Turnbull about how to approach the British exit from the European Union.

"Where it makes sense, we will co-operate together," Mr Key said yesterday. "Where it is appropriate, we will do things under our own steam."

Mr Key ruled out a joint approach to Britain to negotiate trade access but said there could be a chance to "piggy-back each other" in other areas of similarity.

Hear CNN's Richard Quest speak to NewsTalk ZB's Mike Hosking on Brexit, Europe and the impact on world markets:

Mr Turnbull faces a general election on Saturday and took time out of his campaign schedule for the discussion with Mr Key.

Both are former merchant bankers and Mr Key said he expects the global markets to settle down after the "shock and awe" on Friday, which wiped $2 trillion off the value of global equities after the shock vote.

"Now they have had a chance to digest that and probably get a sense of how long this process ultimately will be, I think the markets will settle down and we will see some of that value restored on the global equity markets," he said at his post-Cabinet press conference.

"Then you will get down to the really hard yards of Britain working through its divorce proceedings essentially with the EU, and New Zealand and Australia and the likes having to complete access arrangements in the EU and in Britain."

The British would be under pressure because they would be working simultaneously on negotiating their exit from the European Union and the terms of access with non-EU countries such as Australia and New Zealand.

Mr Key did not think it would cause a repeat of the global financial crisis. The New Zealand economy was stronger than it was in 2008-09 and world markets were more robust.

The long-term implications were more for the British economy and its capacity to compete in Europe than the global stage.

New Zealand's current access arrangements for trade and people to Britain and Europe will remain in place, in the meantime.

Trade Minister Todd McClay is due to meet his British and EU counterparts in China in two weeks.

Australia and New Zealand are preparing to launch free-trade agreements with the EU but doing so separately and at different paces.

Until the vote, the EU was on track to get approval this year from its members, begin talks next year and have them finished by 2019.

Double-edged sword

Federated Farmers president, Dr William Rolleston, said Mr Farage's offer to increase trade ties with Britain was welcomed. However, he viewed a looming Brexit as a double-edged sword.

"While we have got a better opportunity going into Britain, we have actually lost a free market ally sitting around the table in Europe," Dr Rolleston said.

"The last 43 years of having Britain in the EU has opened doors for us within Europe. Those relationships - how strong they are - will be tested.

Currently New Zealand primary exports to Britain are at three per cent, and 11 per cent to Europe. It was a different picture when Britain entered the European Union 43 years ago - at that time 40 per cent of exports went to Britain. And in the 1950s, more than 80 per cent of New Zealand exports went to Britain.

"There has been some commentary about a possible recession in Britain and a decrease in demand," Dr Rolleston said.

"But it's not the sort of shock that we would have had, had we still been sending 80 per cent of our products to Britain. And in fact, while it was hard it has been of real benefit to New Zealand because we have come out fitter and stronger from that challenge that we had 40 years ago.

"Would we want to be in a position now where we were relying almost solely on Britain? I don't think so. Actually for us, the world is a better place and we are in a much stronger position. So from that point of view, he [Farage] probably has nothing to apologise for."

- Additional reporting Audrey Young, Nicholas Jones