Two new studies which shed new light on the cost and impact of unnecessary red tape and arbitrary trade rules on New Zealand’s exports have been welcomed by Minister for Trade, Todd McClay.
“Technically referred to as non-tariff barriers, these unfair obstacles are costing New Zealand businesses US$5.9 billion every year,” says McClay.
This is according to a report released this week by the New Zealand Institute of Economic Research (NZIER) – Quantifying the costs of non-tariff measures in the Asia-Pacific region. The research was commissioned by the Ministry of Foreign and Trade as a contribution to Asia Pacific Economic Cooperation (APEC) work on this issue.
In that, the overall cost of NTBs within APEC is estimated to be US$790 billion – three times as much as the costs associated with simple border tariffs, comments NZIER chief executive John Ballingall.
“New Zealand’s primary sector exporters bear the brunt of APEC economies’ NTBs. The dairy sector alone faces NTBs within APEC of US$2.7 billion per year,” he says. “Our beef and horticultural sectors suffer too, facing additional costs of US$770 million and US$310 million respectively each year.”
In parallel to this, the APEC Business Advisory Council has released a new study – ‘Non-Tariff Barriers in Agriculture and Food Trade in APEC: Business perspectives on Impacts and Solutions‘ commissioned from the University of Southern California’s Marshall School of Business. This shows that, due to non-tariff barriers, food trade is more difficult and expensive than it should be, undermining goals of food security in the Asia Pacific region.
“Non-tariff barriers to trade are a pervasive, costly issue for our exporting businesses. As the studies show, even as our growing network of trade agreements has reduced the costs for our exports, there has been a significant rise in the number of non-tariff barriers that exporters face,” says McClay.
“These new studies underline the importance of the Government’s efforts to address non-tariff barriers, to ensure that New Zealand businesses can compete on a level playing field overseas.
“Addressing non-tariff barriers has always been a significant part of our export-focused work. It is core work for a range of government agencies.
“A cross agency group has been set up under the Government’s Business Growth Agenda to get to grips with the impact that non-tariff barriers are having on our exporters and what we can do to get rid of them. New Zealand Trade and Enterprise is encouraging its export customers to come forward with market access issues they may be encountering.
“Reducing the impact of non-tariff barriers on New Zealand business has also been highlighted as one of the key issues under the Government’s refreshed trade policy strategy.”
McClay, who was recently in Lima for the annual APEC Summit, welcomed the role that APEC has been playing in highlighting the issues posed by non-tariff barriers.
“I am pleased to see APEC taking a leadership role on this issue. New Zealand has been a big driver of this work and we will continue to make a strong contribution to APEC’s efforts in this area,” says McClay.