TPP makes sense for meat exports

Tomorrow, the New Zealand Government will host the signing of the Trans-Pacific Trade Partnership by TPP Ministers from all of the connected countries in Auckland. This is only the start of the process, however. There is plenty more work to be done.

Despite voluble protests from a minority in New Zealand to the contrary, as an exporting nation it makes absolute economic sense for this country to be involved in such free trade agreements (FTAs) and it’s worth reading the TPP National Interest Analysis and also the www.tppfacts.nz site to see why. Ministry of Foreign Affairs (MFAT) officials have worked long and hard, with both Labour and National in Government, to achieve the complex deal we have to date and New Zealanders should be confident that New Zealand’s best interests are always front and centre.

The agreement makes sense for meat, amongst all the other export sectors. The meat industry, in the form of Beef + Lamb NZ and the Meat Industry Association, has been vocal in its support of TPP and other FTAs as they liberalise New Zealand’s trade conditions with key markets, making it easier to do business.

TPP Meat Sector OutcomeMFAT have come up with a good graphic to explain what’s at stake (right).

New Zealand’s meat exports to TPP countries in 2014 amounted to $2.3 billion. When TPP is fully implemented, MFAT has calculated the potential tariff savings for the sector to be in the region of $72 million a year.

New Zealand beef will have unrestricted access to the US market  after five years – this will include $10.8 million of US in-quota duties eliminated immediately when the agreement comes into force. Japan, New Zealand’s fifth most valuable market for beef exports, will reduce its 38.5 percent tariff on beef to nine percent over 15 years. MFAT’s calculated savings are $17.9 percent when the agreement comes into force and $48 million a year, after 15 years.

Sheepmeat will be duty free to all TPP countries, except Mexico, where it will be after eight years.

While it won’t hold any immediate tariff or quota benefits for the deer industry,  TPP would still be a positive thing, according to Deer Industry New Zealand chief executive Dan Coup. He says regulatory barriers can sometimes do more to impede trade than tariffs and quotas – pointing to fire blight and apple exports to Australia.

“Under the TPP, there would be an independent disputes mechanism that would allow our exporters to appeal regulations in importing countries, that they believe are unjustified or unfair.”

Many deer farmers also produce beef and lamb, which are both products that will benefit in time from lower trade barriers.

“For example, the TPP would mean New Zealand would have a free trade agreement with Japan, which will put our beef exporters on an equal footing with Australia, which already has a bilateral FTA with Japan,” he says.

 

 

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