MIA Matters: TPP, Brexit, China on 2017 to-do list

MIA chairman John Loughlin speaking at the 7th China International Meat Conference in China.

Next year will be busy on the trade access front for the Meat Industry Association (MIA) and its members. This follows significant events in two of this country’s longest-standing markets, the US and UK, writes MIA chief executive Tim Ritchie.

Last issue, we noted 2015-2016 had been a ‘busy and productive’ year and it looks like 2017 will be equally so.

The new President-Elect in the US has put the focus squarely on trade – particularly on ratification of the Trans-Pacific Partnership (TPP). New Zealand already has good access into the US for beef and sheepmeat and it is our largest beef market. We expect that access to continue.

However, if TPP ratification is scrapped or significantly delayed, it will affect exports to other important markets, like Japan.

Should TPP be fully implemented, the current beef tariffs levied by Japan would be reduced from 38.5 percent to nine percent over 16 years, providing safeguard levels are not exceeded. Estimates show that New Zealand meat exporters could save $18 million a year immediately when the new arrangement comes into force and, after 16 years, $48 million a year in duties.

As importantly, the TPP would put us on an equal playing field in Japan with our competitors, in particular Australia. Australia and Japan concluded a free trade agreement which came into effect on 15 January 2015. Australian beef now enjoys an eight percent tariff advantage over New Zealand for chilled beef and eleven percent for frozen. This has already impacted on our market share and exports – and in the absence of TPP, our competitive position will suffer further as the tariff on Australian beef imports further reduces.

Another major 2017 focus will be on the implications of the UK’s vote to leave the European Union (EU) – Brexit. The New Zealand red meat sector is by far the largest New Zealand exporter to the EU’s 28 member countries and, by extension, to the UK.

So, we will follow the Brexit process closely, particularly as the trade relationship that is negotiated between the EU and UK will potentially have a significant impact on the New Zealand red meat industry’s important trade into both markets. Currently, continental European markets are an important destination for UK sheepmeat.

While there will be considerable focus on the trade relationship with the US and UK, other markets will not be neglected.

Industry continues to place great importance on investing in its relationship with China and on providing Chinese consumers with high quality meat products. The relationship was highlighted recently during the visit of an MIA-led industry delegation in November.

After a period of rapid growth in New Zealand exports to China from 2010 to 2014, New Zealand exports to China have stabilised over the last two years, with a more even split in the trade between beef and sheepmeat, Loughlin told the audience at the CFNA conference.
After a period of rapid growth in New Zealand exports to China from 2010 to 2014, New Zealand exports to China have stabilised over the last two years, with a more even split in the trade between beef and sheepmeat, Loughlin told the audience at the CFNA conference.

Our chairman, John Loughlin, spoke at the China Chamber of Commerce for Foodstuffs and Native Produce (CFNA) conference in Beijing. His presentation highlighted the importance of China for the New Zealand meat industry, and the work that has been undertaken over recent years to develop the relationship between the two countries at all levels: government, whole-of-industry and company to company.

Noting a reduction in New Zealand’s sheepmeat exports to 140,000 tonnes in the year ending 30 September 2016, he said China was still our country’s major market for the product. However, beef exports have grown by around 92 percent over the year to 76,600 tonnes and there is now a more even split in trade between beef and sheepmeat (see graph, right).

His presentation showed China is also now the largest market in the world for New Zealand’s halal certified sheepmeat and beef with a third of total production exported there during the year to end September. The next largest markets were Malaysia and Indonesia, both at seven percent of the total.

MIA chairman John Loughlin (fifth from right), chief executive Tim Ritchie (second from left) and trade and economic manager Sirma Karapeeva (left) are pictured during their visit on stand with other colleagues from the New Zealand team at the Anufood China ‘Taste the Globe’ trade exhibition. The stand was a joint exercise between MIA, Deer Industry NZ and New Zealand Trade and Enterprise aimed at furthering New Zealand lamb, beef and venison in China.
MIA chairman John Loughlin (fifth from right), chief executive Tim Ritchie (second from left) and trade and economic manager Sirma Karapeeva (left) are pictured during their visit on stand with other colleagues from the New Zealand team at the Anufood China ‘Taste the Globe’ trade exhibition. The stand was a joint exercise between MIA, Deer Industry NZ and New Zealand Trade and Enterprise aimed at furthering New Zealand lamb, beef and venison in China.

While in China, the MIA in partnership with Deer Industry New Zealand and New Zealand Trade and Enterpise invested in a red meat sector stand at the AnuFood China “Taste the Globe” product exhibition to further New Zealand lamb, beef and venison interests in China (picture left).

We will also be paying close attention in 2017 to the development and implementation of the Government’s new trade policy strategy. The Government describes the strategy as ‘directional’ to chart the course of travel for the next 10-15 years.

MIA welcomes the indicated increased attention to free trade agreement implementation as well as negotiation. Also, that there will be enhanced focus on addressing non-tariff barriers (NTBs). NTBs add considerable costs to doing business and can have significant commercial consequences, particularly when they block or frustrate trade irrespective of the negotiated preferential tariff access.

This article appeared in Food NZ magazine (December/January 2016) and is reproduced here with permission.

 

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