Brexit's impact on NZ will be limited - PM

Brexit - The immediate effects of the United Kingdom's withdrawal from the European Union on New Zealand are likely to be limited, Prime Minister John Key says.

The official result of the historic referendum is still to come in but reported results point to a vote by the UK to leave the EU, by 52 percent to 48 percent.

British Prime Minister David Cameron has said he will resign, and global financial markets are erratic as investors react to the vote result.

In a statement, Mr Key said New Zealand would seek a fresh trade deal with the UK in the longer term.

New Zealand is also hoping to launch negotiations for a free trade deal with the EU.

This country had a strong relationship with both the EU and the UK, and that would continue, Mr Key said.

"This was always a decision for voters in the UK and we respect the decision they have made."

Earlier in the week Mr Key said there would be a two-year period where the UK would still be part of the EU, which gave New Zealand some room to work out any new arrangements.

Labour leader Andrew Little said New Zealand should draw on its long and historic relationship with the UK, to ensure future trade.

"We now are going to have to have a period where we work out our own trade relationship directly with the UK while at the same time continuing with the negotiations with EU for a free trade agreement.

"So it's going to double the effort we have to make."

He said the same went for making sure New Zealanders could travel there in coming years.

"It allows the opportunity for the UK and New Zealand to negotiate a freer flow of people between the two countries.

"The argument used against New Zealand and relaxing the arrangements there for Kiwis going up there which is that they have to treat us different to the EU because they don't have the same relationship - that argument doesn't hold anymore."

The vote seems to have been driven not only by fears about immigration, but years of austerity and an economic struggle for many, he said.

Green Party co-leader James Shaw said the UK's decision to leave would send ripple effects around the world.

"This ushers in a period of great instability for the UK itself and also for the European Union and therefore for the world, because obviously the European Union is a significant geopolitical player. So we're in for a bit of a ride I think," he said.

"I don't know what the impact is going to be directly for New Zealand, but most of our trading partners are in the Pacific Rim. So I think the impact on our own economy is likely to be low.

"We don't know what the implications will be for New Zealand and New Zealanders, and we'll just have to take it as it comes I think," Mr Shaw said.

In a speech to the House of Lords in London in May, New Zealand First leader Winston Peters threw his weight behind the 'leave' campaign.

Now he said this vote was a huge wake-up call for governments everywhere.

People were sick and tired of being ignored, he said.

"It's a devastating wake-up call for the power structure and the highly placed bureaucracy in both the UK and in Europe, but in democracies everywhere.

"People are not going to be treated like they are invisible anymore.

"They came out in huge measure to make it clear what they thought of the kind of experts that have been leading them by the nose and misleading them most of the time."

Mr Peters said it should be a lesson to all democracies, including New Zealand's political system, to pay attention to ordinary peoples needs.

"It's a bad day for Prime Minister Cameron and an even worse day for the UK Labour Party so out of step with UK workers."

There were now opportunities for New Zealand to reconnect with the UK, he said.

"The chance we have to reconnect with the UK as one of our markets and indeed to reconnect with the commonwealth in a closer way.

"It'll mean that our young people have a greater opportunity to get to the UK, if they wish to do what people have been doing for decades," Mr Peters said.

Uncertainty over economic impact

Earlier this week, Trade Minister Todd McClay said he thought it would be disastrous for the UK if it voted to leave the EU, but he believed New Zealand would weather the storm.

And Mr McClay said the timing was good because if the UK voted to leave, it would not affect New Zealand's trade with the country for at least two years.

"The process in the European Union is that they must have discussions over a two-year period about how to exit, so number one they don't exit the day after the referendum ... and I've received advice that it could take up to 10 years that they would work out what that relationship would be."

However, he said eventually there would be significant costs.

"The EU is very important for us for exports and trade now, in some ways more important than the UK, so we're going to have to take some time to work through that with them."

A study by the New Zealand Institute of Economic Research considered several areas that would impacted by a Brexit.

Its deputy chief executive, John Ballingall, said the UK economy would likely slow down and that would mean fewer British tourists visiting New Zealand, while the value of our exports there would fall by an estimated $190 million a year.

He said New Zealand companies would probably not face higher trade barriers, but New Zealanders would likely find it harder to get work because of tighter immigration rules.

"The key reason why voters are selecting Brexit at the moment is largely around immigration, they are very concerned that the UK is being swamped by immigrants from the EU and they want to do something to stem that tide."

Mr Ballingall said there would not be much benefit for New Zealand from the UK's exit.

"The only potential upside would be if New Zealand could suddenly negotiate a free trade agreement with the UK very quickly, and that gave us better access than we have at the moment."