NZIBF’s submission to MFAT on the New Zealand UAE Comprehensive Economic Partnership Agreement Negotiations.
Opening dairy markets through TPP
TPP has an ambitious agenda to open up markets. For the dairy sector in New Zealand and for Fonterra it offers prospects to break down long established and high barriers to trade. This matters as the dairy sector exports around 95% of the milk produced in New Zealand. In that situation it depends very much on keeping as many markets open as possible. Through the existing FTAs with Australia, Chile, China, ASEAN, Taiwan and now Korea a fair bit of the world is covered. Yet that still leaves large dairy markets like the EU, USA, Japan and Canada with very high tariffs up to 200-300% and with quotas of limited size.
TPP is the best opportunity available to attack the barriers in Japan, Canada and the USA as well as improving existing access in Mexico and Peru. Not surprisingly the intent of opening up these markets is not a shared objective with the domestic industries. Strong pressure is being exerted on their governments to minimise the tariff and other concessions.
Around the agriculture world dairy is a highly protected commodity. Its only rival is sugar.
The intent to eliminate tariffs, reach high quality solutions and comprehensively cover all products is very important in TPP. While there would inevitably be a longish time line to reach the goal of no tariffs this is a very serious negotiating objective. New Zealand has an outstanding record in its existing FTAs of reaching zero tariffs and obtaining high quality outcomes. Trade negotiations are always complex but they also need a clear purpose.
Fears are often expressed that New Zealand will ‘swamp’ domestic production in other countries. At around 20 million tonnes New Zealand is a relatively limited milk producer as compared to the whole of the EU and USA. The New Zealand supply is spread across a vast range of countries depending on long and short term market conditions. The objective in TPP is to open up more opportunities for dairy exports within TPP supplying countries including New Zealand.
A high quality TPP result would over time be a major advance in liberalising dairy trade. It would extend substantially the number of markets that are on a path to being opened and increase significantly the percentage of trade covered by FTAs.
This post was prepared by Ken Geard, Senior Trade Advisor at Fonterra. Ken is retiring after a long career in trade policy at first with the Government, then with NZ Dairy Board and latterly Fonterra. We in the New Zealand trade community thank Ken for his great service and we wish him all the best for the future.
REGISTER WITH TRADE WORKS
Register to stay up to date with latest news, as well as saving and discussing articles you’re interested in.
Latest News
SUBMISSION TO THE MINISTRY OF FOREIGN AFFAIRS AND TRADE – APRIL 2024
NEW ZEALAND-UAE COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT NEGOTIATIONS This submission is made on behalf of the New Zealand International Business Forum (NZIBF), whose members are listed at Annex A[1]. NZIBF is a forum of senior business leaders working together...
NEW TEAM FOR AUSTRALIA NEW ZEALAND LEADERSHIP FORUM
Media release, 2 April 2024 The New Zealand Co-Chair of the Australia New Zealand Leadership Forum (ANZLF), Greg Lowe, welcomes the appointment of Stephen Jacobi and Simon Le Quesne to the New Zealand arm of the ANZLF Secretariat. The ANZLF brings business leaders,...
NZ/EU FTA A BONUS FOR SOME SECTORS – BUSINESS FORUM
Media release, 22 March 2024 The NZ International Business Forum (NZIBF) acknowledges the passage of the implementing legislation for the New Zealand/European Union Free Trade Agreement and looks forward to the FTA’s entry into force on 1 May. “This agreement was...
“MEAGRE OUTCOME” FROM WTO IN ABU DHABI – BUSINESS FORUM
Media release, 2 March 2024 Despite its overwhelming importance at the heart of the international trade system, members of the World Trade Organisation (WTO) have concluded their Ministerial in Abu Dhabi (“MC13”) with only a meagre outcome. NZ International Business...
To go or woe with the WTO?
We’ve been here before with the World Trade Organisation (WTO). The global trade body’s 13th Ministerial meeting (“MC13”) opens in Abu Dhabi on Monday 26 February, with Trade Minister McClay serving as Vice-Chair. In recent weeks diplomats, trade...
DCANZ – Agricultural Subsidy Distortions Must Be Addressed
23 February 2024 - Media Release by the Dairy Companies Association of New Zealand (DCANZ) As the world’s Trade Ministers head to a WTO meeting in Abu Dhabi, the Dairy Companies Association of New Zealand (DCANZ) is calling for an immediate capping of agricultural...
Asia-Pacific business leaders call for greater economic dynamism with people at the center of the APEC agenda
16 February 2024 - APEC NEWS RELEASE Issued by The APEC Business Advisory Council (ABAC) The APEC Business Advisory Council (ABAC), meeting this week in Kuala Lumpur, Malaysia, expressed deep concerns about the growing pressures of economic fragmentation and the risks...
SUBMISSION TO THE PARLIAMENTARY FOREIGN AFFAIRS, DEFENCE AND TRADE COMMITTEE – FEBRUARY 2024
NEW ZEALAND EUROPEAN UNION FREE TRADE AGREEMENT LEGISLATION AMENDMENT BILL Introduction and Summary This submission is made on behalf of the New Zealand International Business Forum (NZIBF) and Export NZ. NZIBF is a forum of senior business leaders working...
ABAC Statement on WTO MC13 – February 2024
Now, more than ever, the world needs a credible, relevant, and effective multilateral trading system, with the World Trade Organization (WTO) at its core. In this era of global challenges, the APEC Business Advisory Council (ABAC) recognizes that the WTO is...
Global Industry Statement on the WTO Moratorium on Customs Duties on Electronic Transmissions
NZIBF has joined 170 international business associations in calling for an extension to the current moratorium on tariffs applying to digital services (like Netflix) at the forthcoming WTO Ministerial meeting. The undersigned associations urge WTO members to support...
Resilient supply chains: Yesterday, today and tomorrow
Published by the Hinrich Foundation, Singapore, 23 August 2024 By Stephen Jacobi History has much to teach us about the way trade contributes to prosperity through the movement of goods, services, people, and ideas. Today, data can be added to this web of...
SUBMISSION TO THE MINISTRY OF FOREIGN AFFAIRS AND TRADE
GENERAL REVIEW OF THE COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS- PACIFIC PARTNERSHIP (CPTPP) DECEMBER 2023 Summary This submission is made on behalf of the New Zealand International Business Forum (NZIBF). As individual NZIBF Members may make their own...
Todd McClay – your trade mission, should you choose to accept it …
As published by Newsroom 19 December 2023 By Stephen Jacobi “Twas the week before Christmas, When all through the house Not a creature was stirring, Except busy trade officials … ‘Tis the season to be “BiM-ing”* and the NZ International Business Forum has sent its...
2023 – Steps forward and back
Trade liberalisation moved forward and backward in 2023. Some notable gains have been achieved for New Zealand, but war, geo-political rivalry and global inflation continue to depress global markets. While the pandemic continued to lurk in the shadows, 2023 was the...
NZIBF releases Brief to the Incoming Minister of Trade
DECEMBER 2023...