Red meat sector set to save $63* million in tariffs

Sam McIvor
Sam McIvor.

Beef + Lamb New Zealand (B+LNZ) and the Meat Industry Association (MIA) welcome the signing of the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP).

Minister for Trade and Export Growth David Parker signed the CPTPP in Chile on Friday, alongside representatives of the 10 other member countries Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, and Vietnam.

B+LNZ chief executive Sam McIvor says the sector will save $63* million in tariffs once the trade agreement is fully implemented.

“The CPTPP is especially important for the sector given the overall export focus. The New Zealand sheep and beef sector exports close to 90 percent of its production totaling $7.5 billion, on which we paid $231 million of tariffs in 2016.

“Over one-third of the total tariffs paid in 2016 were to CPTPP member countries, with a significant proportion of those tariffs paid in Japan ($73 million) – where applied tariffs on our beef exports are 38.5 percent.

“In the absence of CPTPP, we have been losing significant market share in countries where our competitors have preferential access – particularly Australia’s beef access into Japan.”

Australia’s beef exports to Japan have increased by a cumulative $1 billion since its Free Trade Agreement (FTA) came into force, which has resulted in New Zealand losing out on approximately $53 million worth of beef exports to Japan over the same period.

Tim Ritchie.

MIA chief executive Tim Ritchie says the CPTPP will immediately put New Zealand’s red meat sector on a level playing field.

“It will also prevent Japan from imposing a safeguard tariff on New Zealand beef like they did last year on frozen beef raising the tariff to 50 percent.

“CPTPP will give New Zealand a competitive advantage over the United States beef industry, which will continue to face either the 38.5 percent tariff or the higher 50 percent tariff if the safeguards are triggered again.

“The CPTPP also contains ways to address complex non-tariff barriers, which are often costlier than tariffs and more difficult to quantify. This will prove useful in terms of opening markets and ensuring that they stay open.

“It will be positive for exports and help raise the living standards of New Zealanders. The red meat sector exports directly support 80,000 jobs (and families) employed across New Zealand, mostly in the regions.

“B+LNZ and the MIA support the government’s work in trade liberalisation and look forward to the expeditious ratification of the CPTPP.”

Federated Farmers says the news will strengthen this country’s export sector.

“Being part of this trade agreement is essential if the new Government is to realise its aspirational goals for New Zealand,” president Katie Milne says.

“The Federation is delighted that the Government has stayed resolute throughout negotiations to find a consensus, resulting in the signing of the agreement.”

Stephen Jacobi
Stephen Jacobi.

Also welcoming the news, New Zealand International Business Forum executive director Stephen Jacobi says the signing of CPTPP is a “bright moment in a world where trade is under threat from inward-looking protectionism”.

“While some appear poised to turn their backs on the benefits of the international trading system, CPTPP’s eleven members have chosen the path of openness and integration. The New Zealand Government and its allies across the Pacific are to be congratulated for taking this step” he says.

Jacobi says the CPTPP signing was about securing sustainable growth and jobs.

CPTPP is a good deal for New Zealand, requiring little change to existing policies, he says. “But the gains will come only if six economies ratify and the agreement enters into force. From today we need to get cracking on the ratification process in New Zealand. We look for wide support from all parties in the New Zealand Parliament.”

*based on 2016 trade data.

 

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