Significant progress in China, NTBs now focus for meat industry

Recently returned from China, Meat Industry Association (MIA) chief executive Tim Ritchie gave FoodNZ a market access snapshot, looking back at activity over the past year and forward at 2015.

Tim Ritchie (MIA, left) pictured with Madame Yu vice-president of CFNA at the China International Meat Conference
Tim Ritchie (MIA, left) pictured with Madame Yu vice-president of CFNA at the China International Meat Conference

During his visit to China, Ritchie met with a number of industry bodies and participated in the China International Meat Conference, where he gave a presentation on the New Zealand meat industry and participated in a panel discussion on food safety, innovation and developments in the international meat industry.

His overall impression from the visit was of significant progress on regulatory and whole of industry relationships.

“The additional Ministry of Primary Industries (MPI) resources in China, and the meat industry’s top level delegation visit in June, have proven to be good investments,” he reports. “While New Zealand is now in a relatively good position compared to many other exporting countries, there is still work to be done to sort outstanding access and plant-listing issues and to strengthen the working relationship with key industry bodies.”

Ritchie’s visit was part of this process, as was the signing of a cooperation agreement between the MIA and the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-Products (CFNA), which took place alongside the visit of the Chinese Premier to New Zealand last November.

The MIA/CNFA agreement aims to promote the trade of sheep and beef products, strengthen cooperation and promote exchanges between the two industries, Ritchie explains, adding that the MIA is in the process of signing similar cooperation agreements with a number of other whole-of-industry organisations in China.

“This whole-of-industry work has been in addition to the strong commercial relationships that New Zealand companies have developed with customers in China over many years.”

While efforts to strengthen the relationship with China have been a major focus of industry activity during the year, there are other important markets for the meat industry and a significant achievement has been the finalising of the long-running free trade agreement (FTA) negotiations with South Korea.

Korea is one of New Zealand’s major beef markets, taking nearly 23,000 tonnes worth $123 million in the 12 months ending September 2014. It is also an important market for a number of other co-products, such as beef tripe and offals and sheep skins, which generated a further $80 million in export revenue over the same period.

New Zealand beef currently faces a 40 percent tariff when it enters the Korean market, but the FTA will remove that over a 15 year period.

Finalising the FTA has been one of the industry’s major market access priorities, as the Korea tariff on US beef is currently set at 32 percent, and is also being phased out over 15 years, and the tariffs on Australian beef have begun to be phased out following the ratification of its FTA last December.

When the agreement was announced, MIA chairman Bill Falconer noted: “We were at risk of losing our competitiveness in the Korean market, due to the US FTA and other deals that Korea has signed with beef exporters in recent months, but this deal will make sure we don’t fall further behind our competitors.”

With the conclusion of the negotiations with Korea, New Zealand has now finalised negotiations with a significant number of its major trading partners. Combined with the work to deepen the relationship with China, it meant that 2014 was a year of progress for the meat industry on the international front.

However, there is still work to be done. On the FTA front, the meat industry is keen to see the completion of the Trans-Pacific Partnership negotiations and progress on other FTA negotiations, such as those with India and the signalled discussions on an FTA with the European Union, says Ritchie. The meat industry is also looking to bring more focus on other impediments to trade, which are collectively known as non-tariff barriers (NTBs).

“NTBs can increase the cost of doing business with a market, or even prevent trade with a market completely. Examples of NTBs that the meat industry faces include excessive labelling requirements, burdensome plant audits and unscientific processing requirements, such as having to freeze cartons to a lower temperature than scientifically justified,” he says.

“Although the cost of NTBs can be very difficult to quantify, a recent study undertaken by the Australian meat industry calculated the cost of non-tariff measures for the industry there is $1.25 billion a year.”

MIA, in conjunction with a number of other industries, is commissioning an independent study to determine the size of ‘the prize’ for New Zealand exporters.

Identifying where the major barriers are, and what they cost, will help guide the allocation of industry and government resources and effort for the all-important market access work.

This article has appeared in Food NZ magazine (February/March 2015) and is reproduced here with permission.

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