TPP to deliver removal of tariffs

The Meat Industry Association has welcomed the conclusion of the negotiations for the Trans Pacific Partnership (TPP) Agreement.

Tim Ritchie“These have been long and complex negotiations and we want to congratulate the Trade Minister and his officials for getting the deal across the line and securing New Zealand’s trade interests,” said MIA chief executive, Tim Ritchie when the announcement was made by Trade Minister Tim Groser in early October.

In 2014, New Zealand exports of beef, sheepmeat and co-products to TPP countries totalled $2.4 billion. This was over one-third of New Zealand’s exports to the world. The sector’s exports to the TPP countries were charged a total of $94.3 million in tariff costs.

The MIA understands that, based on current trade flows, it is estimated the TPP will deliver some $72 million in tariff saving per year for the beef and sheepmeat sector once fully implemented.

The recently released text of the agreement shows that some of the highlights for the New Zealand meat industry are:

  • Removal of all tariffs on sheepmeat in TPP countries within eight years, or less from when the agreement enters into force
  • Removal of all tariffs on beef in TPP countries, except Japan, within 11 years or less from when the agreement enters into force.
  • Reduction of Japanese tariffs on beef from 38.5 percent to nine percent over 16 years

While the outcome for beef into Japan could have been better, if the TPP is implemented quickly, it will achieve a level playing field with Australia by removing the tariff advantage Australian beef enjoys under the Australia-Japan trade agreement.

Japan has also agreed to remove all tariffs on edible offals, over periods ranging from six to 16 years depending on the specific product. These tariffs range from 12.8 percent to 50 percent and this will provide significant benefits for New Zealand as Japan is the industry’s largest market for edible offals, taking exports worth $36.5 million in the 2014-15 season.

Of equal importance for the industry, will be the implementation of the chapters covering Sanitary and Phytosanitary Measures and Technical Barriers to Trade that provide for non-tariff barriers to be addressed.

The TPP, together with the recently signed NZ-Korea free trade agreement and the existing trade deals with China and Taiwan, will secure market access and the red meat sector’s competitiveness not only into North Asia but will further integrate New Zealand into the Asia-Pacific regional supply chains.

“We encourage all parties to now move quickly through their respective ratification processes to enable the swift and timely implementation of this significant trade deal,” says Ritchie.

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