Beef + Lamb New Zealand (B+LNZ) and the Meat Industry Association (MIA) are right behind the Government’s continued efforts to bring the Trans-Pacific Partnership 11 (TPP11) into effect and want to see it done as soon as possible.
B+LNZ CEO Sam McIvor says the trade agreement will deliver major gains to the New Zealand sheep and beef sector, despite the US’s withdrawal last year.
“Japan is New Zealand’s fifth largest market for red meat and co-products, with exports of over $302 million exports last year. Japan is the market in which the sheep and beef sector faces its single highest tariff burden. Last year the sector faced tariffs of $73 million on its $302 million exports, an average tariff of 24 percent – and money that would have trickled down to all New Zealand households. “
McIvor says the TPP11 had become even more important in recent weeks.
“On 1 August, Japan increased its tariffs on frozen beef from 38.5 percent to 50 percent under a World Trade Organisation (WTO) safeguard, which will apply until March next year. Australia, one of our largest competitors in the market, is not affected by the safeguard because it has an existing bilateral trade agreement with Japan. Australian frozen beef only faces a tariff of 27.2 percent, giving it a massive 22.8 percent advantage. This is already having a major impact on our exports, which were worth $79 million last year.”
MIA chief executive Tim Ritchie says Australia is responsible for some 50 percent of Japan’s beef imports which have contributed to the trigger of the safeguard on frozen beef. There is a distinct possibility that a similar WTO safeguard may be triggered on chilled beef exports into Japan in the next few months which would further disadvantage the sector.
“Japan is New Zealand’s largest chilled beef market worth $63 million last year. Japan also concluded free trade agreement (FTA) negotiations with the European Union earlier this year, and agreed to give the EU similar outcomes on beef as in TPP. The Government’s negotiating mandate for TPP-11 will level the playing field and will ensure our exporters remain competitive in overseas markets.
“TPP would also deliver important gains in other markets such as Mexico and Canada, where our sheep and beef exports face tariffs ranging from 10 to 60 percent,” says Ritchie.
“Given the absolute importance of this initiative for our sector, we trust the leadership New Zealand has taken continues post the election,” McIvor and Ritchie say.