The red meat sector has welcomed the ratification of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) agreement taking to four the number of countries that have formally ratified the Asia-Pacific trade deal.
New Zealand’s implementing legislation was passed into law by the New Zealand Parliament yesterday, with the support of all parties except the Greens, after a law banning foreign buyers of existing New Zealand homes came into effect on Monday. The foreign buyer ban was supported by all parties except National and Act.
Minister for Trade and Export Growth David Parker today handed a copy of the notification of ratification to New Zealand’s High Commissioner to Canada Daniel Mellsop. New Zealand is the official depository for the 11 nation agreement.
David Parker is in Ottawa during a six-day trade trip to the United States and Canada for talks focused on the future of the World Trade Organisation (WTO).
“The importance of CPTPP has grown over recent months with the rapid escalation of protectionist measures around the world,” he says.
In recent days he held talks with the top US trade official, trade representative ambassador Robert Lighthizer, his deputy ambassador Jeffrey Gerrish and other trade experts in Washington DC.
At the White House he met the Director of the National Economic Council Larry Kudlow and had a private meeting with President Donald Trump’s deputy Chief of Staff, New Zealander Chris Liddell.
David Parker says the CPTPP will come into effect 60 days after six countries ratify the deal.
New Zealand joins Japan, Mexico and Singapore that have already ratified. The agreement requires at least six of the 11 member countries to ratify the agreement before it can come into force and Australia and Canada are expected to join very soon. That means the tariff reductions and increased exports will begin very early in 2019. Other countries in the 11-national group are Brunei Darussalam, Chile, Malaysia, Peru and Vietnam.
New Zealand’s red meat sector is strongly encouraging the remaining member countries to ratify before the end of the year.
Once CPTPP comes into force it will be one of the largest free trade agreements in the world and will present massive opportunities for the New Zealand sheep and beef sector, given its export focus, says Beef + Lamb NZ chief executive Sam McIvor.
“Our sector pays over $230 million in tariffs – with a significant proportion of those tariffs applied on New Zealand beef exports to Japan. Once the CPTPP is fully implemented, it is expected to save the sector approximately $63 million in tariffs,” he says.
“In the absence of the CPTPP, we have been losing significant market share in countries where our competitors have preferential access – particularly Australia’s beef access into Japan. The CPTPP will immediately put New Zealand’s red meat sector on a level playing field.
“Australia’s beef exports to Japan have increased by a cumulative $1 billion since its free trade agreement 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.”
The CPTPP 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.
The agreement will give New Zealand a competitive advantage over the US 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 US was part of the original Trans-Pacific Partnership (TPP) agreement but withdrew in 2017 requiring the remaining members to negotiate and agree the CPTPP.
Meat Industry Association (MIA) chief executive Tim Ritchie says the CPTPP isn’t just about cutting tariffs.
“The agreement 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,” he says.
“In the face of growing protectionism around the world, the CPTPP highlights the importance of trade liberalisation and strengthens the architecture of international trade rules which is of real importance to small trading nation like New Zealand.
“It will be positive for exports and help raise the living standards of New Zealanders. Red meat sector exports directly support 80,000 jobs (and families) employed across New Zealand, mostly in the regions.”
The sector acknowledges the work the government has done to conclude the CPTPP and its expeditious ratification, and recognises the work done by previous governments and officials on its predecessor, the TPP. We continue to support the government’s work in trade liberalisation and look forward to the entry into force of the CPTPP.
Businesses can take advantage of improved trading conditions
David Parker says New Zealand’s ratification means that from day one businesses will be able to take advantage of improved trading conditions and lower tariffs.
“We have not previously had a trade agreement with Canada, Mexico nor with the world’s third largest economy Japan.
“Economic modelling shows exports, the New Zealand standard of living, and wages, will increase as a consequence, David Parker says, adding CPTPP markets are collectively home to 480 million consumers and make up 13.5 percent of world GDP.
“Important changes were made in CPTPP, compared with the original TPP, to deliver on this Government’s bottom lines including, protecting drug agency Pharmac, the Treaty of Waitangi, and the Government’s right to regulate in the public interest,” David Parker says.